<p>The cost of living in the U.S. probably fell in October by the most in almost sixty years, while manufacturing and homebuilding sank deeper into a recession, economists said before reports this week. </p>
<p>Consumer prices probably dropped 0.8 percent last month, the most since 1949, according to the median estimate in a Bloomberg News survey. Builders broke ground on the fewest houses in at least a half century and factory output weakened further, other reports may show. </p>
<p>Commodity costs plunged in October when the economy, which descended last quarter, went into freefall as credit and financial markets collapsed. Slumping sales are forcing retailers to lower prices, giving the Federal Reserve scope to keep cutting interest rates to limit the damage. </p>
<p><code>Tumbling energy and commodity prices have altered the inflation landscape,‘’ said Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania.</code>More rate cuts are needed as the economy is sinking deeper into recession.‘’ </p>
<p>The Labor Department’s consumer-price report is due Nov. 19. Fuel, clothing and auto costs probably dropped last month as sales at U.S. retailers fell 2.8 percent, the most since records began in 1992, economists said. </p>
<p>The slump in crude oil is feeding through to prices at the pump. The average cost of a gallon of regular gasoline plunged 17 percent last month to $3.08, according to AAA. </p>
<p>You think?? I haven’t noticed a decrease in my food costs, mortgage payment, doctors visits copays, utility bills, clothing costs, college expenses, insurance costs or much else. The only things I have seen go down are gas and fuel oil. I’m not complaining about that…but that is not the bulk of where I spend my money.</p>
<p>I have in clothing. If you are willing to shop a bit, the bargains in clearance and sales are quite amazing in some regular department stores. Others do not have nice merchandise this year.</p>
<p>Prices going down? I really wish so. TP at Costco - up 30% since we bought a pack last year; bag of lemons - up 25% since last time a bought a bag of them at Costco (ususally I pick a bag before Thanksgiving), however, New York steak was $5.99 vs $8.99 just this past summer, but I did not need any steak.</p>
<p>My “silver lining” of the slowdown: more trees will be left standing, fewer “chicken-coop” style developments will popping up in my neck of the woods, and I will not have to waste my time by attend community meetings trying to fight another developer who is plotting to bulldoze down five perfectly fine homes to build 50 ugly-painted houses with no backyards in their place.</p>
<p>CCers… give the economy a chance to filter down the price decreases. :)</p>
<p>I don’t drive that much, but my families gas bills are a savings of $100 a month. Most families drive a lot more than my family drives.</p>
<p>Heating bills should and will be lower too.</p>
<p>Food prices should stop going up and maybe even go down.</p>
<p>Hey… sports tickets are even going down or staying flat.</p>
<p>Housing prices are going down, obviously.</p>
<p>Insurance costs…insurance company investments are down the toilet and investments help insurance companies keep costs down :eek:. So those costs may not look too good.</p>
<p>College tuition… going down at the schools CCers care about… very doubtful.</p>
<p>While average food has stayed high I have seen some great specials and such. If you shop the discounted items they are very reasonable. For example last week QFC had a top brand of frozen dinners at $1.50 each. I can’t make a decent sandwich for that. They make great lunches at that price compared to the $5-$8 I typically spent going out for lunch. And I don’t have to go out in the rain.</p>
<p>The prospect of broad spectrum deflation should frighten us all a lot more than moderate inflation. Take a look at Japan’s economy over the last several decades and you’ll see why. Suppose, for example, that you own your home and you’ve got another twenty years of mortgage payments to make. You’re contractually obligated to make those payments and they don’t decrease – but in a deflationary economy the value of the house that you’re purchasing with them over time DOES. Deflation is a vicious cycle – people think that prices are declining, so they put off making purchases thinking that they will get a better price. The problem with that is that deferring purchases hurts the economy and reduces demand even more. No consumer demand, no growth in manufacturing/services/retail, etc., business bankruptcies increase, layoffs and job losses increase, unemployment increases, purchasing power decreases. It’s not a good thing.</p>
<p>The only decrease we’ve experienced is gas prices declining, although that doesn’t help me very much. Our local utilities are all raising their rates. I expect our total monthly utility costs to increase at least $50; mid-winter will be worse. Food prices, in general, are still high, as are paper products and cleaning supplies. Our auto ins. rates are up, but we don’t want to make a change until ds has his own coverage. </p>
<p>Our new home has required some work, and folks here are actually charging more and blaming it on higher gas and materials costs (nevermind that gas is much lower than just a few months ago.) </p>
<p>I have seen more clothing sales. However, I’ve also returned everything that I ordered online recently because the retailer misinformed me about the items’ country of origin. Every last item was made in China. The tainted Heparin from the PRC was the last straw for me. I am resigned to paying more for everything, from clothing to household goods, in order to buy products not made in China. </p>
<p>The univ. where ds is now enrolled increased tuition about 7% this semester and plans additional increases. A new dorm and a major classroom bldg. remodel were just announced as part of the reason for the higher tuition and fees.</p>
<p>House prices in our neighborhood have fallen dramatically. One reason may be that there are at least four foreclosures just on our street. The only possible benefit to us is that we can protest our tax assessment based on our home’s much lower market value.</p>
<p>When the price of goods falls sharply due to deteriorating economic conditions it’s because people can no longer afford the price of those goods. </p>
<p>Such a situation can not be viewed as being beneficial. Especially if those previously affordable goods are also “vital”.</p>