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Words in the News
 
Friday 16 May 2003
 
US deflation fears
 
Car production and prices fell in April Wholesale prices in the US have had their biggest fall in more than half-a-century, prompting fears of deflation. The prices fell by just under two per cent in April, the biggest fall since records started in 1947. This report from Stephen Evans:
 
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The latest figures for American wholesale prices show they fell by nearly two per cent last month. Part of the reason was a fall in oil prices, reversing a previous rise brought on by war, but other prices fell as well - particularly those of cars and clothing.

Earlier this month, the Federal Reserve warned of the risk of what it called 'an unwelcome substantial fall in inflation'.

Falling prices would turn the economic world upside down. There would be large pressure for pay cuts, for example, and that would put pressure on anyone with debts.

We aren't there yet. Some other figures do show consumers and businesses getting more confident about economic prospects. If the latest figures, though, are a sign of further price falls, any current glimmers of optimism would vanish.
 
 
Listen Listen to the words
 
wholesale prices
 
the prices of goods leaving the producer
 
fall
 
decrease, reduction
 
reversing
 
changing to its opposite
 
brought on by
 
caused by
 
substantial
 
here - big, noticeable
 
turn… upside down
 
change... completely
 
we aren't there yet
 
the situation is not as bad as described yet
 
glimmers of optimism would vanish
 
even the slight hope will be lost
 
 
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