While this might ease the pinch on wallets, it's actually nothing to celebrate. For starters, when prices decrease, pay will eventually decrease too (we've blogged about all that before). In fact, if unemployment reaches the magic 10 percent number, folks like Capital Economics expect that we could end up in a deflationary spiral. That's bad news -- remember what happened to Japan when they saw a very long period of deflation after their banking crisis in the 90s? Nothing grew -- for 15 years. And Japan lost its position on the world stage very quickly (btw, my father, a Turkish engineer who dragged me to Japanese lessons back in the 1980s when it seemed Japan would take over the world, is now pushing Mandarin for my younger brother).

So, you may wonder, if prices are falling, what happened to all that talk about inflation? It's definitely still a longer term risk, especially given that every central bank in the world is printing money at the same time. And, its worth noting that a large chunk of the CPI decrease was due to the spike and subsequent decline in oil prices last year. That said, it's a fair bet that over the next 12-24 months, deflation is a bigger risk than inflation. My advice: go out and hit those sales before your paycheck falls (you'll be contributing to a virtuous circle of consumption!).

(Photo Credit: Capital Economics)