| Year-on-year, consumer prices dropped for six months in a row to end-August 2009. Consumer prices dropped 1 percent in October, 2008. This was the largest one-month fall in prices in the US since at least 1947. That record was again broken in November, 2008 with a 1.7% decline. In response, the Fed decided to continue cutting interest rates, down to a near-zero range as of December 16, 2008. Economist Nouriel Roubini predicted that the United States would enter a deflationary recession, and coined the term "stag-deflation" to describe it. The United States then began experiencing measurable deflation, steadily decreasing from the first measured deflation of -0.38% in March, to July's deflation rate of -2.10%. On the wage front, in October 2009 the state of Colorado announced that its state minimum wage , which is indexed to inflation, would be cut, which would be the first time a state has cut its minimum wage since 1938. |
