Deflation Watch: October Consumer Prices Fall By Record Amount
(Since series began in 1947)
From CNBC
19 Nov 2008Consumer Prices Take Record Drop in October
U.S. consumer prices plummeted at the sharpest rate on record in October as a slowing economy caused energy costs to drop for a third straight month, according to a Labor Department report on Wednesday.
The widely watched Consumer Price Index fell 1 percent, exceeding forecasts by Wall Street analysts for a 0.8 percent decline and the biggest drop since the department began monthly data in 1947. Core prices, which exclude food and energy items, declined 0.1 percent in contrast to the 0.1 percent advance that had been forecast.
The latest sign of rapidly declining prices, including for clothing and transportation as well as energy, implies a weakening economy no longer faces any inflation threat and could see deflation return if consumer demand keeps softening...
And from The Economic Populist:The debate is over: deflation is here
CPI just declined a full 1% in October. This means we have had -1.5% deflation in the last three months. The Panic of 2008 is officially the first deflationary bust in almost 60 years.
As I have explained previously, every time there has been 1.5% deflation or greater, going back almost 100 years, we have been in a deflationary recession.
The good news is that year over year inflation is 3.7%, a decline from 5.6% in July. Producer prices have declined more dramatically, from 9.8% to 5.1%. Both of these should continue to decline for the next couple of months (due to predictable seasonal factors plus continuing declines in Oil). Per historical patterns of how recessions end, IF money supply continues to expand, and PPI continues to decline more than CPI, we will more likely than not see a recovery by July 4, 2009.
From CNBC
19 Nov 2008Consumer Prices Take Record Drop in October
U.S. consumer prices plummeted at the sharpest rate on record in October as a slowing economy caused energy costs to drop for a third straight month, according to a Labor Department report on Wednesday.
The widely watched Consumer Price Index fell 1 percent, exceeding forecasts by Wall Street analysts for a 0.8 percent decline and the biggest drop since the department began monthly data in 1947. Core prices, which exclude food and energy items, declined 0.1 percent in contrast to the 0.1 percent advance that had been forecast.
The latest sign of rapidly declining prices, including for clothing and transportation as well as energy, implies a weakening economy no longer faces any inflation threat and could see deflation return if consumer demand keeps softening...
And from The Economic Populist:The debate is over: deflation is here
CPI just declined a full 1% in October. This means we have had -1.5% deflation in the last three months. The Panic of 2008 is officially the first deflationary bust in almost 60 years.
As I have explained previously, every time there has been 1.5% deflation or greater, going back almost 100 years, we have been in a deflationary recession.
The good news is that year over year inflation is 3.7%, a decline from 5.6% in July. Producer prices have declined more dramatically, from 9.8% to 5.1%. Both of these should continue to decline for the next couple of months (due to predictable seasonal factors plus continuing declines in Oil). Per historical patterns of how recessions end, IF money supply continues to expand, and PPI continues to decline more than CPI, we will more likely than not see a recovery by July 4, 2009.