By John W. Schoen, Senior Producer
The slowing global economy is putting downward pressure on costs for businesses and consumers alike. It’s also squeezing profits and incomes.
The weak job market has helped keep wage costs flat since the recession ended three year ago. Now, with widening evidence that the global economy is entering a new slowdown, the cost of a wide range of commodities from oil to copper to coffee is falling rapidly.
While that’s good news for consumers, the across-the-board price drops are further evidence that demand is drying up as the world economy continues to slow. China’s once booming economy has cooled sharply this year. That has driven prices down sharply in the world’s second-largest economy and has raised worries about deflation, which can be as intractable a problem as too much inflation.
Recent data on factory production and job growth point to a further slowing in an already weak U.S. economy. And the ongoing financial turmoil in Europe has sparked a widening recession that shows no signs of easing.
Continue reading Falling prices point to further global slowdown →