Falling Prices Point To A Struggling Economy
STEVE INSKEEP, host:
NPR's business news starts with prices falling everywhere.
(Soundbite of music)
INSKEEP: We've been getting reports this week of negative inflation, which sounds like good news, falling prices. But economists say it's not. It's a sign of our struggling economy, sort of like a going out of business sale. Falling consumer demand is behind the continued fall in oil prices, which are now heading toward $50 a barrel. Remember when they were way over a hundred? Prices for consumer goods are eroding at a record price, according to a report out yesterday from the Labor Department. Asian stock prices fell sharply today. Japan's Nikkei index and South Korea's KOSPI both slid nearly seven percent. European stocks were also down. And this comes after another rotten day for the U.S. stock market. They fell to five-year lows and dragged the Dow Jones industrial average below 8,000. NPR's Jim Zarroli has our report.
JIM ZARROLI: Auto executives went to Congress yesterday to ask for a government bailout, but the response they got was so discouraging that their stock prices fell sharply. Ford fell 25 percent to $1.26 a share. General Motors dropped to a price not seen since the middle of World War II. Also losing a lot of ground was Citigroup. The company eliminated more than 55,000 jobs this week in an effort to persuade investors it was getting its fiscal house in order, but the effort seems to have failed. The company's shares fell to a 13-year low.
Those weren't the only things pushing stocks down yesterday. There were disappointing reports about consumer prices and housing construction. But prices really fell in the afternoon, following the release of the minutes of the Federal Reserve's October 29 meeting. The report suggests that Fed officials had become much gloomier about the economy. They now expect unemployment to rise as high as 7.6 percent next year. It was 6.5 percent last month. Jim Zarroli, NPR News, New York.
NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.