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:
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.