Prices are falling, isn't that a good thing?

The government's March report on consumer prices registered an annual drop, a first in over 50 years, but that might not be good news for cash-strapped consumers, economist Nouriel Roubini told Consumer Reports.

Roubini, a professor of economics at New York University’s Stern School of Business, warned that deflation could cause more problems for an already struggling economy.

"There are different types of deflation. There is good deflation and there is bad deflation. And we are now in a period of bad deflation," Roubini said. "Right now there is too much supply and not enough demand."

More from our interview with Roubini:

Part 1: It’s not all bad news

Part 2: Surviving the next year

$13 billion from stimulus to go to high speed rail

President Barack Obama continued to push his vision of a rebuild American economy Thursday with an event promoting high-speed rail lines, promising that a $13 billion investment would create jobs and help rebuild the nation's aging infrastructure.

Flanked by Vice President Joe Biden, an avid train traveler, and Secretary of Transportation Ray LaHood, the president said the money from the American Recovery and Reinvestment Act would be handed out to worthy projects in two stages.

"The first round of funding will focus on projects that can create jobs and benefits in the near term," Obama said. "We're not talking about starting from scratch, we're talking about using existing infrastructure to increase speeds on some routes from 70 miles an hour to over 100 miles per hour--so you're taking existing rail lines, you're upgrading them."

The second batch of funding--some $5 billion--is an investment in the future, with new trains that could travel in excess of 100 miles per hour, the president said.

"The next step is investing in high-speed rail that unleashes the economic potential of all our regions by shrinking distances within our regions," he said. "There are at least 10 major corridors in the United States of 100 to 600 miles in length with the potential for successful high-speed rail systems."

Obama again pointed out the criticisms his economic plans have met.  To those who would say that high-speed rail isn't realistic, Obama gave examples of successful lines around the world.

For those who would say the president's investment in railways does not really fight the recession, Obama replied with the story of Abraham Lincoln who built the transcontinental railroad during the Civil War.

"While fighting raged on one side of the continent, tens of thousands of Americans from all walks of life came together on the other," Obama said. "Dreamers and risk-takers willing to invest in America."

You can learn more about the White House's high-speed rail plan from the Department of Transportation.

New unemplyment claims fall by 53,000

The number of new claims for unemployment benefits fell by 53,000 for the week ending April 11, the Labor Department reported Thursday, with 610,000 people seeking benefits.

Over 6 million people were on the unemployment rolls for the prior week, an weekly increase of 172,000, the government's estimates show.

According to the Labor Department, the highest insured unemployment rates in the week ending March 28 were in Michigan (8.0 percent), Oregon (7.9), Rhode Island (7.1), Idaho (7.0), Wisconsin (7.0), Pennsylvania (6.7), Nevada (6.2), Alaska (6.0), Montana (6.0), and Vermont (5.9).

Consumer prices show first annual drop since 1955

The Consumer Price Index, the government's measure of food, energy, and other costs, fell unexpectedly in March.

After seasonal adjustments, the rate fell 0.1 percent in March, according to the government's data.

The index has decreased 0.4 percent over the last year, the first 12 month decline since August 1955, the Labor Department reported Wednesday.

The Labor Department said the decrease was due to falling energy prices, which were 3 percent lower in March than in February.

Food also cost less in March. With a decrease of 0.1 percent, the food index is at virtually the same level as October 2008, the numbers show.

Obama describes the rock and reasoning supporting his economic policies

In a Tuesday speech, President Barack Obama harkened back to Biblical times for a comparable situation to the economic crisis in which the country (and his administration) are mired.

Now, there's a parable at the end of the Sermon on the Mount that tells the story of two men. The first built his house on a pile of sand, and it was soon destroyed when a storm hit.  But the second is known as the wise man, for when 'the rain descended, and the floods came, and the winds blew, and beat upon that house, it fell not: for it was founded upon a rock.'

It was founded upon a rock.  We cannot rebuild this economy on the same pile of sand. We must build our house upon a rock.  We must lay a new foundation for growth and prosperity--a foundation that will move us from an era of borrow and spend to one where we save and invest; where we consume less at home and send more exports abroad.

The rock the president wants under the U.S. economy is actually made up of five "pillars," he said.

As he described them in his speech at Georgetown University:

1. "New rules for Wall Street that will reward drive and innovation, not reckless risk-taking"
2. "New investments in education that will make our workforce more skilled and competitive"
3. "New investments in renewable energy and technology that will create new jobs and new industries"
4. "New investments in health care that will cut costs for families and businesses"
5. "New savings in our federal budget that will bring down the debt for future generations"

Despite the government's efforts, Obama said that the country will not recover quickly from this recession.

"There is no doubt that times are still tough," he said. "By no means are we out of the woods just yet.  But from where we stand, for the very first time, we're beginning to see glimmers of hope.  And beyond that, way off in the distance, we can see a vision of an America's future that is far different than our troubled economic past."

Number of new unemployment claims still high but down a bit

The Labor Department reports that 654,000 new claims for unemployment benefits were filed in the week ending April 4, showing a drop of 20,000 claims from the prior weeks estimate of 674,000.

The same week one year ago, the number of new claims was only 358,000.

About 5.84 million people were on the unemployment rolls for the week ending March 28, the Labor Department's numbers show. That's 95,000 more than the week before.

Buzzword: Sellsumer

Although we came across this term on the Trendwatching site on April 1st, it’s no joke. As unemployment rates continue to climb and the economy shows no sign of picking up, more consumers are taking to new ways to make money, including renting out spare space in their homes, hawking homegrown produce, and selling their handicrafts through online marketplaces like Etsy. These entrepreneurs-by-necessity are dubbed “sellsumers,” or “ordinary consumers [who] make money instead of just spending it.”

According to Trendwatching, the recession-fueled boom is part of the “mega-trend that is ‘consumer participation.’” We can’t help but think that many sellsumers would prefer to participate in a full-time job with benefits and security, but in this economy, making a few extra bucks as a craftsman or consultant may be the next-best thing.

Administration strikes cautious economic tone as G.M.'s new C.E.O. makes the Sunday rounds

General Motors' new C.E.O., Fritz Henderson, appeared this morning on NBC's Meet the Press and CNN's State of the Union to say that G.M. would survive as a company, even though bankruptcy loomed as a viable option. Henderson took the reigns at G.M. after the Administration asked former-C.E.O. Rick Wagoner to resign.

Henderson said that G.M. was focused on quickly returning to profitability so that they could repay the taxpayer's money.

"The day we took money from the taxpayer was one of the -- one of the most difficult days of certainly my career and of the history of General Motors," he said. "We need to respect the fact that we need to look after the taxpayer, we need to justify to the consumer and the taxpayer that we’re going to succeed going forward. And one of the -- one of the happiest days of my future career is going to be the day we pay the loans back."

Henderson refused to rule out the possibility of bankruptcy, saying that the company would do whatever was necessary to meet the goals set by the President's Task Force on the Auto Industry.

"Now we’re 55 days, not 60 days away -- and we either accomplish this job outside of bankruptcy in the short term; or alternatively, if it’s necessary, we’ll go into bankruptcy in order to get this job done," he said.

White House Senior Advisor stressed on Fox News Sunday that G.M. still had much work to do. "Whether it comes through some sort of structured bankruptcy or another process," he said, "there is no doubt that for General Motors to survive and prosper, as we all want them to, they’re going to have to do serious restructuring."

Speaking to the broader economy, Treasury Secretary Timothy Geithner stressed on CBS' Face the Nation that even as the economy recovers, it may take some time for the unemployment rate to fall.

"The typical pattern of recoveries," he explained, "is that growth recovers, growth starts to turn positive, people start to spend more, people -- businesses hire more, they invest more, before you see unemployment peak. That’s the crude reality of recoveries."

Geithner also left open the possibility that the government would ask bank executives to resign.

"If, in the future, banks need exceptional assistance in order to get through this, then we’ll make sure that assistance comes with conditions, not just to protect the tax payer but to make sure this is the kind of restructuring necessary for them to emerge stronger," he said. "Where that requires a change of management of the board, we’ll do that."

Geithner also emphatically denied reports that the Administration was working to circumvent Congress' restrictions on executive pay.

"Our obligation is to apply the laws that Congress just passed on executive comp," he said. "And we’re going to do that."

The Sunday talk shows also discussed North Korea's failure this morning to launch a missile that could deliver a payload into orbit. Susan Rice, the U.S. Ambassador to the U.N., appeared on ABC's This Week before heading to New York for an emergency meeting of the Security Council.

"Our assessment is that their pursuit of a missile capability is of grave concern and that their aim is to achieve the capability to deliver a weapon as potentially as -- to North America. I think we have to look at exactly what transpired today and make a new assessment of the consequences," she said.

Actual U.S. savings rate may have hit 6% in February

BusinessWeek is reporting that the actual savings rate for most Americans may have risen to 6.4% in February, a significant rise from last year when the savings rate hovered near zero.

The official statistics from the Bureau of Economic Analysis show that personal spending fell by 0.4%, and that the savings rate rose to 4.2%. Those figures, however treat as spending fixed costs like healthcare and education over which consumers have little control. With those categories removed, it appears that "pocketbook spending" fell by 3.1%, and that the savings rate hit 6.4%.

The savings rate has historically hovered near zero as Americans borrowed more than they earned.

Obama hails G-20 progress as Republicans continue attacks on the budget

The President this week hailed the progress made at the recent G-20 summit in London, saying that his visit helped lay the groundwork for a newly strengthened global financial system that would help safeguard America's future prosperity.

The President faced several daunting challenges in London, including earning support for broader stimulus packages in other countries, and projecting the view of a strong America capable of asserting global leadership.

The President used his weekly address to help explain how the week's challenging work related to America's future. "If people in other countries cannot spend," Obama said, "that means they cannot buy the goods we produce here in America, which means more lost jobs and more families hurting."

The President said that working with other nations to stabilize the global financial system presented "the challenge of our time." "Ultimately," he said, "the only way out of a recession that is global in scope is with a response that is global in coordination."

Congressman Paul Ryan, the ranking member of the House Budget Committee, defended the alternate budget this week proposed by Congressional Republicans, characterizing it as a measured and appropriate response during a time of fiscal crisis.

"Our budget gives priority to national defense and veterans health care," he explained. "We freeze all other discretionary spending for five years we enact a spending cap backed up by tough budget enforcement. American families are making sacrifices and tightening their belts Washington should do the same. Our budget also takes steps toward health care reform and retirement security."

By contrast, Ryan warned that the President's budget would make the crisis "much much worse."

"America is not the greatest nation on Earth by chance," he said. "We earned this greatness by rewarding individual achievement, by advancing and protecting natural rights, and by embracing freedom. Our budget reflects those principles, and we offer the American people a better way forward."