Thursday, January 15, 2009

Deflation, Now 2 Months Running

Just a few data points.

Since the new year, gold has been falling in price.

Oil prices have cratered since the massive high last summer.

Since about August, the US Dollar has been increasing in value against the Euro, the Pound, the Swiss Franc and the Canadian Dollar (that is, the buying power of the dollar has been increasing -- the price of these currencies is decreasing).

And here's the latest table for the CPI (Consumer Price Index):
MonthMonthly Inflation Rate
January 20080.50%
February 20080.29%
March 20080.87%
April 20080.61%
May 20080.84%
June 20081.01%
July 20080.53%
August 2008-0.40%
September 2008-0.14%
October 2008-1.01%
November 2008-1.92%

A monthly deflation rate of 1.92% means an annual deflation rate of 23.04%.

One month isn't a trend though, right? Well, October was no picnic either. A monthly deflation rate of 1% hasn't been seen since 1938.

Here's a graph of the inflation rate since 1985 (click the graph to embiggen). Notice anything?

The report for December 2008 comes out tomorrow morning (Jan 16). We'll see what it says.

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