[PEN-L:29417] Re: RE: Re: Re: deflation

[Doug Henwood <dhenwood@xxxxxxxxx>]

Devine, James wrote:

> it's not true deflation unless prices _in general_ are falling,
> though the fall in prices in crucial sectors can indicate that true
> deflation is in the offing.

Consumer prices aren't falling, but producer prices are. Year-to-year
change in US PPI, all and excluding food and energy (core):

          all     core
12/01    -1.7     0.9
1/02     -2.8     0.3
2/02     -2.7     0.7
3/02     -1.7     0.5
4/02     -2.0     0.3
5/02     -2.7     0.1
6/02     -2.0     0.3
7/02     -1.1    -0.2

Clearly, weaker energy prices are pulling down the overall index, but
the core numbers are very low (annual changes well under 1%) - and
most recently negative.

CPI comes out in a few days, but it's very low too - .1 for the
latest month and 1.1 for the year in June.

Doug