One government measure shows that deflation is here, says Floyd Norris
> writing in The New York Times (page C1). The government's quarterly
> growth report, which showed that the economy shrank in the third quarter,
> reported a decline of 0.4 percent, at an annual rate, in prices for
> personal consumption expenditures. It was the first quarterly fall in
> nearly half a century, since the second quarter of 1954, at the end of a
> recession. The number is calculated in a more sophisticated way than the
> more widely followed consumer price index, and it is a figure that the
> Federal Reserve watches. Fed chairman Alan Greenspan prefers the core
> figure for personal consumption expenditures, which excludes food and
> energy. It is still barely positive, at 0.3 percent. What is new here is
> that deflation is spreading from the industrial world to consumers.