{"id":48629,"date":"2023-11-18T10:47:51","date_gmt":"2023-11-18T10:47:51","guid":{"rendered":"https:\/\/prosfunds.com\/business\/falling-prices-may-sound-good-but-deflation-can-be-dangerous-heres-why\/"},"modified":"2023-11-18T10:47:52","modified_gmt":"2023-11-18T10:47:52","slug":"falling-prices-may-sound-good-but-deflation-can-be-dangerous-heres-why","status":"publish","type":"post","link":"https:\/\/prosfunds.com\/?p=48629","title":{"rendered":"Falling prices may sound good, but deflation can be dangerous. Here\u2019s why"},"content":{"rendered":"
\n

\n After encountering rapid price increases for more than two years, discounts at some stores would certainly feel like a much-needed respite.\n <\/p>\n

\n But business leaders, economists and investment moguls aren\u2019t so gung-ho about it.\n <\/p>\n

\n Tech investor Cathie Wood, founder of ARK Investment Management, told The Wall Street Journal in a story published on Wednesday she\u2019s more worried about deflation, when prices fall, than the inverse \u2014 inflation. \u201cWe\u2019re seeing more and more signs of it,\u201d she said, referring to deflation.\n <\/p>\n

\n Falling prices of commodities like copper and lumber \u201cnegatively impacted\u201d Home Depot\u2019s third-quarter earnings, CEO Ted Decker told investors on the company\u2019s earnings call earlier this week.\n <\/p>\n

\n \u201cAs an example, on average, framing lumber was approximately $420 per thousand board feet compared to approximately $545 in the third quarter of 2022, representing a decrease of over 20%,\u201d Home Depot\u2019s executive vice president of merchandising, Billy <\/strong>Bastek, added on the call.\n <\/p>\n

\n \u201cBig-ticket comp transactions, or those over $1,000, were down 5.2% compared to the third quarter of last year,\u201d Bastek said.\n <\/p>\n

\n
\n <\/source><\/source><\/source><\/source><\/picture>\n <\/div>\n<\/div>\n

\n One of the first lessons students learn in Economics 101 is that when the price of a good is higher, people demand less of it. And when the price of a good is lower, people demand more of it.\n <\/p>\n

\n But the problem with deflation is that when people begin to expect lower prices in the future, they have little incentive to make purchases right now. For instance, unless it was absolutely necessary, why would you buy a new oven today if you thought the price would go down significantly in a month?\n <\/p>\n

\n When enough people think that way, it causes massive pullbacks in spending. That can prompt a recession if it means businesses can\u2019t afford to employ as many workers.\n <\/p>\n

\n Deflation is not a problem across the board in the <\/strong>United States, which, like many countries, is experiencing inflation.\n <\/p>\n

\n In China, however, prices across all goods and services were 0.2% lower in October compared to the same month last year.\n <\/p>\n

\n US consumer prices are 3.2% higher compared to a year ago, according to the latest Consumer Price Index. But even though Americans are still paying more for goods and services compared to a year ago, the pace of the increases has slowed significantly.\n <\/p>\n

\n That said, many goods in the United States are a lot cheaper than they were a year ago.\n <\/p>\n

\n For instance, prices for eggs are 22% lower, the second-biggest year-over-year price cut behind health insurance, according to October CPI data.\n <\/p>\n

\n Walmart CEO Doug McMillon said on Thursday consumers could soon encounter more uniform price cuts at grocery stores. He also warned that US-based Walmarts could enter \u201ca deflationary environment.\u201d\n <\/p>\n

\n Besides eggs, other cheaper goods include airfares, gasoline, appliances and smartphones.\n <\/p>\n

\n Preston Caldwell, chief US economist at Morningstar, referred to this as \u201cselective deflation.\u201d For now, he said, \u201cit\u2019s helping to push overall inflation back to the Fed\u2019s 2% target with minimal pain in terms of unemployment and lost output.\u201d\n <\/p>\n

\n \u201cIn other words, it\u2019s making a soft landing possible,\u201d he told CNN.\n <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

After encountering rapid price increases for more than two years, discounts at some stores would certainly feel like a much-needed respite. But business leaders, economists and investment moguls aren\u2019t so gung-ho about it. Tech investor Cathie Wood, founder of ARK Investment Management, told The Wall Street Journal in a story published on Wednesday she\u2019s more […]<\/p>\n","protected":false},"author":1,"featured_media":48630,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-48629","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\nFalling prices may sound good, but deflation can be dangerous. Here\u2019s why | Prosfunds<\/title>\n<meta name=\"description\" content=\"After encountering rapid price increases for more than two years, discounts at some stores would certainly feel like a much-needed respite. But business\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/prosfunds.com\/?p=48629\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Falling prices may sound good, but deflation can be dangerous. Here\u2019s why | Prosfunds\" \/>\n<meta property=\"og:description\" content=\"After encountering rapid price increases for more than two years, discounts at some stores would certainly feel like a much-needed respite. But business\" \/>\n<meta property=\"og:url\" content=\"https:\/\/prosfunds.com\/?p=48629\" \/>\n<meta property=\"og:site_name\" content=\"Prosfunds\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-18T10:47:51+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-18T10:47:52+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/11\/1700304472_gettyimages-1570342706.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"450\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/prosfunds.com\/?p=48629#article\",\"isPartOf\":{\"@id\":\"https:\/\/prosfunds.com\/?p=48629\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/prosfunds.com\/#\/schema\/person\/bab8f1b00ccebe43e39ff640793108e6\"},\"headline\":\"Falling prices may sound good, but deflation can be dangerous. Here\u2019s why\",\"datePublished\":\"2023-11-18T10:47:51+00:00\",\"dateModified\":\"2023-11-18T10:47:52+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/prosfunds.com\/?p=48629\"},\"wordCount\":518,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/prosfunds.com\/#organization\"},\"articleSection\":[\"Business\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/prosfunds.com\/?p=48629#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/prosfunds.com\/?p=48629\",\"url\":\"https:\/\/prosfunds.com\/?p=48629\",\"name\":\"Falling prices may sound good, but deflation can be dangerous. Here\u2019s why | Prosfunds\",\"isPartOf\":{\"@id\":\"https:\/\/prosfunds.com\/#website\"},\"datePublished\":\"2023-11-18T10:47:51+00:00\",\"dateModified\":\"2023-11-18T10:47:52+00:00\",\"description\":\"After encountering rapid price increases for more than two years, discounts at some stores would certainly feel like a much-needed respite. But business\",\"breadcrumb\":{\"@id\":\"https:\/\/prosfunds.com\/?p=48629#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/prosfunds.com\/?p=48629\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/prosfunds.com\/?p=48629#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/prosfunds.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Falling prices may sound good, but deflation can be dangerous. Here\u2019s why\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/prosfunds.com\/#website\",\"url\":\"https:\/\/prosfunds.com\/\",\"name\":\"Funding Factories\",\"description\":\"Latest Finance News and Updates\",\"publisher\":{\"@id\":\"https:\/\/prosfunds.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/prosfunds.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/prosfunds.com\/#organization\",\"name\":\"Funding Factories\",\"url\":\"https:\/\/prosfunds.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/prosfunds.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/08\/ff-dark-logo-1.png\",\"contentUrl\":\"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/08\/ff-dark-logo-1.png\",\"width\":780,\"height\":140,\"caption\":\"Funding Factories\"},\"image\":{\"@id\":\"https:\/\/prosfunds.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/prosfunds.com\/#\/schema\/person\/bab8f1b00ccebe43e39ff640793108e6\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/prosfunds.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1693518183-96x96.png\",\"contentUrl\":\"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1693518183-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/prosfunds.com\"],\"url\":\"https:\/\/prosfunds.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Falling prices may sound good, but deflation can be dangerous. Here\u2019s why | Prosfunds","description":"After encountering rapid price increases for more than two years, discounts at some stores would certainly feel like a much-needed respite. But business","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/prosfunds.com\/?p=48629","og_locale":"en_US","og_type":"article","og_title":"Falling prices may sound good, but deflation can be dangerous. Here\u2019s why | Prosfunds","og_description":"After encountering rapid price increases for more than two years, discounts at some stores would certainly feel like a much-needed respite. But business","og_url":"https:\/\/prosfunds.com\/?p=48629","og_site_name":"Prosfunds","article_published_time":"2023-11-18T10:47:51+00:00","article_modified_time":"2023-11-18T10:47:52+00:00","og_image":[{"width":800,"height":450,"url":"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/11\/1700304472_gettyimages-1570342706.jpg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/prosfunds.com\/?p=48629#article","isPartOf":{"@id":"https:\/\/prosfunds.com\/?p=48629"},"author":{"name":"News Room","@id":"https:\/\/prosfunds.com\/#\/schema\/person\/bab8f1b00ccebe43e39ff640793108e6"},"headline":"Falling prices may sound good, but deflation can be dangerous. Here\u2019s why","datePublished":"2023-11-18T10:47:51+00:00","dateModified":"2023-11-18T10:47:52+00:00","mainEntityOfPage":{"@id":"https:\/\/prosfunds.com\/?p=48629"},"wordCount":518,"commentCount":0,"publisher":{"@id":"https:\/\/prosfunds.com\/#organization"},"articleSection":["Business"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/prosfunds.com\/?p=48629#respond"]}]},{"@type":"WebPage","@id":"https:\/\/prosfunds.com\/?p=48629","url":"https:\/\/prosfunds.com\/?p=48629","name":"Falling prices may sound good, but deflation can be dangerous. Here\u2019s why | Prosfunds","isPartOf":{"@id":"https:\/\/prosfunds.com\/#website"},"datePublished":"2023-11-18T10:47:51+00:00","dateModified":"2023-11-18T10:47:52+00:00","description":"After encountering rapid price increases for more than two years, discounts at some stores would certainly feel like a much-needed respite. But business","breadcrumb":{"@id":"https:\/\/prosfunds.com\/?p=48629#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/prosfunds.com\/?p=48629"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/prosfunds.com\/?p=48629#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/prosfunds.com\/"},{"@type":"ListItem","position":2,"name":"Falling prices may sound good, but deflation can be dangerous. Here\u2019s why"}]},{"@type":"WebSite","@id":"https:\/\/prosfunds.com\/#website","url":"https:\/\/prosfunds.com\/","name":"Funding Factories","description":"Latest Finance News and Updates","publisher":{"@id":"https:\/\/prosfunds.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/prosfunds.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/prosfunds.com\/#organization","name":"Funding Factories","url":"https:\/\/prosfunds.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/prosfunds.com\/#\/schema\/logo\/image\/","url":"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/08\/ff-dark-logo-1.png","contentUrl":"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/08\/ff-dark-logo-1.png","width":780,"height":140,"caption":"Funding Factories"},"image":{"@id":"https:\/\/prosfunds.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/prosfunds.com\/#\/schema\/person\/bab8f1b00ccebe43e39ff640793108e6","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/prosfunds.com\/#\/schema\/person\/image\/","url":"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1693518183-96x96.png","contentUrl":"https:\/\/prosfunds.com\/wp-content\/uploads\/2023\/08\/avatar_user_1_1693518183-96x96.png","caption":"News Room"},"sameAs":["https:\/\/prosfunds.com"],"url":"https:\/\/prosfunds.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/prosfunds.com\/index.php?rest_route=\/wp\/v2\/posts\/48629","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prosfunds.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prosfunds.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prosfunds.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prosfunds.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=48629"}],"version-history":[{"count":1,"href":"https:\/\/prosfunds.com\/index.php?rest_route=\/wp\/v2\/posts\/48629\/revisions"}],"predecessor-version":[{"id":48631,"href":"https:\/\/prosfunds.com\/index.php?rest_route=\/wp\/v2\/posts\/48629\/revisions\/48631"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/prosfunds.com\/index.php?rest_route=\/wp\/v2\/media\/48630"}],"wp:attachment":[{"href":"https:\/\/prosfunds.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=48629"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prosfunds.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=48629"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prosfunds.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=48629"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}