Low Inflation In The United States
Deflation is defined as a fall in the general price level. It is a negative rate of inflation. However, deflation cannot necessarily be disadvantageous, but occasionally deflation/low inflation can cause economic productivity and can also cause high unemployment for certain periods. Even though one may think that a general fall in prices can be a good thing, as it leads to greater consumer purchasing power, a persistent fall in prices can however bring negative effects towards the economic stability and growth. (Cox Jeff , The US is closer to deflation than you think,2015)
The United States in January 2015 had a deflation that has not happened since 2009. According to the labour department there was decline of -0.1% in the prices of goods
in January 2015 from January 2014 meaning it cost less to buy goods/services in America from January 2015 than it did in January 2014. Since October 2009, it is the first time for the US economy to have experienced annual deflation. (Cox Jeff, The US is closer to deflation than you think, 2015)
The deflation is due to the cheap price of gas, the gallon of gas was $3.40 last year ago and now it cost around $2.15 on average.
The United States in January 2015 had a deflation that has not happened since 2009. According to the labour department there was decline of -0.1% in the prices of goods
in January 2015 from January 2014 meaning it cost less to buy goods/services in America from January 2015 than it did in January 2014. Since October 2009, it is the first time for the US economy to have experienced annual deflation. (Cox Jeff, The US is closer to deflation than you think, 2015)
The deflation is due to the cheap price of gas, the gallon of gas was $3.40 last year ago and now it cost around $2.15 on average.