Deflation: Why Aren't Your Prices Falling?

If Alan Greenspan is so worried that deflation--falling prices for goods and services--could hurt the economy, why is it that so many prices seem to be going up?

It all has to do with what you're measuring. The core Consumer Price Index (CPI), which the Fed chairman watches, is up only 1.5% (and could turn negative, the Fed warns), but it doesn't include volatile food and energy prices. The cost of services, which includes out-of-pocket expenses that you notice most, has risen nearly twice as much as the core CPI--2.8% in April over the year before. Car insurance rose 9%, consumer...

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