| Credit & Debt | Personal Finance | Economic Crisis | Housing Market | Employment Trends | Expert Insight |
Subscribe  Print 
|
||
Low inflation good for debt management prospectsThis was confirmed by recent government statistics showing that the Consumer Price Index rose by a modest 0.2 percent margin in September, following a 0.4 percent increase in August. Despite the recent small increases, the past 12 months have actually seen an average decline in the CPI by 1.3 percent. In the latest report, the Bureau of Labor Statistics indicated that food prices had declined, along with energy. This is a good sign for consumers heading into the winter months, especially if they happen to use natural gas heat. Food prices have also now declined for six of the past eight months. Still, people are also paying somewhat more for things like transportation, medical care and vehicles. Looking at statistics over the past year, consumers have actually seen fuel oil prices fall by 36 percent, gasoline by 29.7 percent and utility gas service by 28 percent. While consumers are saving money on some basic cost of living needs, other government reports indicate that they are also spending and earning somewhat more, as of last month at least. This is a good sign in the longer term for the economy because it suggests the worst of the recession has passed. The recent report from the Commerce Department showed that personal income for August was up by 0.2 percent, while personal consumption expenditures rose by 1.3 percent. That month also saw a significant increase in durable goods purchases, largely due to the popular Cash for Clunkers for program, which provided incentives for consumers to buy more energy efficient vehicles. Consumers were also saving an average of 4 percent of their income as of August, which is far more sustainable from a debt management standpoint than the zero percent levels that characterized much of the earlier parts of this decade.
|
||
