Consumer inflation tame in ’09 while wages fall (worst fall since '90)

[SarahB]

Source: MSNBC

WASHINGTON - U.S. consumer inflation was tame in 2009, with prices rising 2.7 percent. Yet American families felt squeezed as their spending power sank in the face of falling wages, job losses and higher prices for energy, medical care and education.

A surge in energy prices last year offset the biggest drop in food costs in nearly a half century.

The Labor Department said Friday its Consumer Price Index rose a modest 0.1 percent in December. Excluding food and energy, prices were also up just 0.1 percent last month.

A separate department report showed inflation-adjusted weekly wages for the 12 months ending in December fell 1.6 percent — the sharpest decline since 1990. Slack wages and scarce job creation have slowed consumer spending, hindering the economy's ability to mount a strong recovery.

Read more: http://www.msnbc.msn.com/id/34876328/ns/business-stocks_and_economy/

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Ok, somebody explain again how the economy is going to improve?

[Name removed]

1. Deleted message

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[n2doc]

2. Falling wages make inflation that much worse

If you take a 10% pay cut, the effective inflation for you is 10%+2.7%....

[proudohioan]

5. +1

[Zoeisright]

3. Gee, 1990 - the effects of another Bush.

What a surprise.

[Bluenorthwest]

4. So there was 2.7 percent inflation last year

but the Social Security COLA was not applied because they said prices stayed flat. Guess it is all in how you do the math. No inflation is not the same as 2.7% now is it. Well it seems that in DC, it is the same. None, some, what's the difference?