Covid-19 driving a fall in consumer price index that could lead to recession, say economists

13th May 2020 (Last Updated May 13th, 2020 08:15)

13 May

The consumer price index (CPI) continues to fall as the Covid-19 pandemic has forced businesses to shutdown and people to remain under lockdown.

The consumer spending has drastically reduced amid this environment with the threat of rising inflation or even deflation.

Pedro da Costa, a journalist, shared an article on the decline in consumer prices in the US. The consumer price index (CPI) dropped 0.8% in April after falling 0.4% in March, which is biggest decline since December 2008 when the country was going through recession.

The article is based on a report from the Labour Department that showed a record decline in prices in April raising the possibility of deflation.

 

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