Consumers are not buying homes, because they expect house prices to be lower one year out. Not surprising, when you consider that home prices have fallen in 80 cities.
It’s not just housing anymore: shoppers fear buying prepaid gift cards from retailers due to the threat that they might go broke. It’s more than a threat: Circuit City has filed for bankruptcy.
Automakers are trolling on Capitol Hill (and YouTube) asking for mercy and, oh yeah, $25B in bailout money from taxpayers. Consumers have already shunned Detroit’s cars, this is why they’re in this mess, but with the specter of bankruptcy, sales will fall even more.
Consumption has halted to a screech, no doubt, with a 1% growth in online commerce, which last year at this time was growing 17% year-over-year.
Add it all together (or subtract it all together) and you have a 2.8% decline in consumer prices.
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