Deflation returns to US for first time since 1955 - papers

According to The Independent, consumer prices were 0.4 per cent lower last month than in March 2008, the first year-on-year drop since August 1955, as the effects of last summer's oil price collapse fed through into energy bills. The spectre of deflation has haunted monetary policymaking, since a spiral of falling prices, declining wages and collapsing output could leave the US economy in an intractable recession, but economists said yesterday's milestone was far from that nightmare scenario. Excluding volatile food and energy prices, year-on-year inflation was still 1.8 per cent higher t...