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July 13, 2009

Price trends

One way to cope through trying times is to find silver linings, good things that are happening amidst all the bad news. When we talk about the struggling economy, can we find any glimmerings of silver linings? Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"Well, we can, and one such lining is in consumer prices. The rate at which consumer prices have risen has slowed considerably during this recession. For example, if we look at the last year that we have data for, which is April 2008 to April 2009, average consumer prices actually fell. That's very, very unusual. That's much better than the 3 to 4 percent rate of increase that we had been seeing. However, a lot of this good news is due to the fact that gasoline prices were falling. When you take out gasoline, which is very volatile, and also food prices, we see that average prices went up about 1.8 percent last year. So the news is not quite as good as you might expect, but at least we do tend to see consumer prices moderate during economic recessions. I think you can look at that at least as a partial silver lining."

Posted by Dave at July 13, 2009 08:00 AM