The lowest inflation rate in four-years was made possible by a trend that will surely bring smiles to the faces of Americans: Falling prices.Egg prices plunged between March and April by the most since 1984, according to the Bureau of Labor Statistics. Used cars and trucks unexpectedly got cheaper despite auto tariffs. So did clothes.
Those price drops are encouraging and should help families who are hurting from the high cost of living.
But not all price drops are created equal. Some of the good inflation news might be happening for a bad reason: a weakening economy.
But after discussing dropping prices caused by reduced consumer demand:
Others argue it’s far too early to conclude that consumer demand really is faltering.
The timing of Easter may have “mucked” with prices for air travel, hotels and elsewhere, noted Ryan Sweet, chief US economist at Oxford Economics. He said the drop in prices for sports “could be more noise than signal.”
I don’t think consumers are running for the bunker,” Sweet told CNN in an email. “If consumers were hunkering down, they would cut back on dining out and going to the movies.”
Although AMC Theatres is offering 50% off tickets on Wednesdays this summer, restaurants are hardly empty.
In fact, the number of seated diners in the United States from online reservations was 10% higher in April year-over-year, according to OpenTable data. Seated diners so far in May are up 8%.
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