U.S Faces The Post World War Situation Again
History is repeating itself, as the current global economic situation has created deep problems for the U.S, deflation has begun to rise in most parts resulting massive price reduction and decline in demand, such a situation hasn’t occurred in years, the last time we faced deflation was only during the post world war periods, that is during the 1950’s period more than half a century back. This major decline in costs is due to the rapid slump of demand nation wide forcing manufacturers to reduce cost.
The consumer price index fell at an annual rate of 0.4% in March announced the U.S labor department. A staggering decline of energy and gasoline prices by 3% and 4% respectively clearly indicates the weakness of the consumer’s demand and buying power. With the unemployment rate increasing everyday and the financial situation showing no signs of improvement many key personnel believe, this deflation period would persist for a longer time than expected and inflation can never occur unless the global economic crisis settles down.