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Incoming
10-05-2009, 04:52 PM
http://www.google.com/hostednews/afp/article/ALeqM5g2A02uYKPlQ0A3_F7P1XYC23G0VQ



By Miwa Suzuki (AFP) – 6 days ago

TOKYO — Japan saw a fourth straight month of record deflation in August as weak domestic demand hindered an economic recovery from the worst recession in decades, data showed Tuesday.

With rising unemployment weighing on consumer spending, the new government may need to take fresh pump-priming measures to ensure the world's number two economy stays on a recovery path, analysts said.

Japan's core consumer prices dropped 2.4 percent in August from a year earlier, the government said.

Core prices, which exclude those of volatile fresh food, fell for a sixth straight month, after a 2.2 percent decline in July. Compared with the previous month, however, prices were flat in August.

The deepening deflation comes despite recent signs of an improvement in Asia's biggest economy....

Terri
11-03-2009, 06:37 AM
I do not understand why a 2.4 drop in prices is a really bad thing. Even if deflation have been at this rate for 5 months, that is still a 12% drop.

If a loaf of bread was worth $2.50, it would now be worth about $2.15. HAve we not seen similar things in this country?