This article was co-authored by Bill McInturff and Alex Bratty

Is the looming threat to our economy rising inflation, or falling prices, known as deflation? That’s the current debate raging among economists as this month brought some more staggering statistics.

The Consumer Price Index (CPI) dropped 0.1% in March and was flat in April. However, the annual inflation rate has now declined two months in a row. This is not to be taken lightly – in March the 0.4% drop was the first time the annual inflation rate had dipped since 1955. The April numbers — out a few days ago — show the annual inflation rate now at  -0.7%, and posting the sharpest decline on record since 1954.

As pollsters, it’s our job to think ahead and wonder what might be coming…what might we want to ask consumers about now, so we have a measure on it later?  We asked ourselves that question in December 2008, and came up with the answer that deflation could be on the horizon.  So, we asked Americans in our end-of-year NBC/WSJ poll* about it. One half of respondents were asked about inflation, the other half about deflation. Since this stuff can get a little technical we provided some information and context for folks taking the survey:

Inflation: As you may know, inflation refers to when prices for goods and services increase. Inflation can be a problem because it means that goods that people buy regularly – such as groceries, clothing, or gasoline – cost more.

Deflation: As you may know, deflation is the opposite of inflation – it means prices continuously go down. Deflation can be a problem because companies find it hard to make money on the goods they sell, leading them to lay off workers and reduce wages.

Almost all Americans (82%) said they were concerned our economy might experience inflation in the coming year, with a majority (56%) saying they were “very concerned.”  But, perhaps surprisingly, respondents were almost as concerned about the prospect of deflation as well — 76% said they were concerned, and almost half (47%) said they were “very concerned.”

December was a rocky ride on the stock market, and consumers may simply have been jittery about the prospect of any new problem with the economy. Nonetheless, these were pretty compelling numbers at a time when there was little discussion about the possibility of deflation, not to mention the fact that most Americans have never experienced this economic concept.

A few more months of the economic data we’ve just witnessed and there could be a whole new focus on deflation with younger generations being educated on what it means for them and the economy overall.  As your faithful pollsters, we’ll be measuring their opinions on it…

*National survey of 1,009 adults conducted December 5-8, 2008.

(Public Opinion Strategies partners with Peter D. Hart Research Associates to conduct the NBC/WSJ polls. Neither Peter D. Hart Research Associates nor NBC/WSJ are responsible for these conclusions.)