Sunday, October 17, 2010
Inflation Rate Remains Steadily too Low
The national inflation rate remains steadily too low, around 1.1%, nationally with minimal increases expected in the coming months. This is good news for "savers" from individuals and businesses who would like to hold onto their money in the case of a double-dip recession, knowing that their money will be worth just as much now as in the future. If the economy really wants to pick-up, then inflation needs to rise faster. This is a common indication of the strength of an economy. Consumers should also expect a faster increase in future months and in that case, spending will be necessary.
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3 comments:
I think you will start to see spending increase in a few areas in the up coming months.. Watching the news the other day they talked about how the retail sector was starting to recover, and how thats a pretty good sign. If people have money to spend on clothing then hopefully spending would occur elsewhere..
It's interesting to see that even though the Fed has set the interest rate at a very low level yet inflation is remain to bee seen. It's reasonable because people are not spending a lot of their money in this kind of economy.
If the nation is worried about low inflation rates, the Fed can raise expected inflation. This might make consumers spend money in fear of the money losing its value if kept with themselves!
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