Posted by ecoshift on June 8, 2010
Lower prices could mean deflation and double-dip recession –
Jun. 8, 2010 NEW YORK (CNNMoney.com)
Lumber prices are sinking. And while that might make a trip to Home Depot cheaper, it’s also a sign that the global economic recovery and the U.S. housing rebound are in danger of stalling.
Only a few months ago, inflation was the main worry of many economists. But falling prices for the raw materials of many industries, including lumber, have set off deflation warning bells for some economists, who worry that they could signal another global economic downturn.
Prices for framing lumber have tumbled 21% from their peak only five weeks ago, according to figures from the National Association of Home Builders. Prices are also falling for a wide variety of other industrial materials in recent weeks.