It doesn't get much darker than the Great Depression. That's about how dark it looked Tuesday when the Labor Department reported that U.S. consumer prices fell in November at the fastest rate since 1932, the nadir of the Great Depression.
While this might be good news for consumers looking for deals, it's not good for the economy as prices plunged for energy, commodities and airline fares.
The U.S. consumer price index fell by a seasonally adjusted 1.7%, the biggest drop since the government began adjusting the CPI for seasonal factors in 1947. But on a non-seasonally adjusted basis, the CPI fell by 1.9%, the biggest decline since January 1932.
"This is scary stuff," Mike Schenk, an economist for Credit Union National Association, told Marketwatch. "We are teetering on the brink of a massive downward spiral. Deflation is a threat."
Observers are saying that the Fed's move to lower its benchmark rate to 0% today may be historic, but it's probably not likely to help matters.
Energy prices declined by a seasonally adjusted 17%, the most since February 1957, according to the report. Gas prices fell 29.5% in November, the most since the government began keeping records in February 1967, and fuel oil by 7.2%, and commodities fell by 4.1% in November.
Some prices did rise in November, such as medical care and food prices by 0.2% each.
Aaron Crowe is an unemployed journalist in the San Francisco Bay Area. Read about his job search at www.talesofanunemployeddad.blogspot.com