Analysts were caught somewhat off-guard on the news that consumer prices fell 0.1 percent in April. Although slight, this is the first decrease in the cost of living in more than a year. A move by retailers to cut prices in a bid to increase overall sales is likely responsible for the decrease.
While the economy is slowly gaining strength, there are still roadblocks on the horizon that could derail a recovery. Unemployment remains near 10 percent and concerns that the EU debt crisis could spread to other markets, has nervous consumers keeping a close eye on their spending.
“There simply isn’t any kind of price pressure of any consequence in the economy,” said David Resler, chief economist at Nomura Securities International Inc. in New York, who accurately forecast the decline in prices. “This puts the Fed firmly in place for the foreseeable future.”
Source: Bloomberg
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Latest posts by Scott Boyd (see all)
- Japan’s Demographic Trap - 25 June 2012
- Officials Talk Openly of Greek Euro Exit - 16 May 2012
- Greek Voters Prepare to Roll the Dice - 15 May 2012