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Deflation November 20, 2008

Posted by A Texan In Grad School in Economic Statistics.
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The CPI has declined 1% in October.  The BLS points out that this is the “…largest one month decrease since publication of seasonally adjusted changes began in February 1947.”  Most of this was in energy, which declined 8.6%.  But, the core deflation (I’ve never heard that before) is still .1%.  Here’s the chart at the BLS:

                                Seasonally adjusted                      

     Expenditure                                         Compound
      Category          Changes from preceding month      annual     Un-
                                                           rate    adjusted
                                                          3-mos.   12-mos.
                     Apr.  May June July Aug. Sep. Oct.   ended     ended
                     2008 2008 2008 2008 2008 2008 2008 Oct. 2008 Oct. 2008

 All items..........   .2   .6  1.1   .8  -.1   .0 -1.0      -4.4       3.7
  Food and beverages   .9   .3   .7   .9   .6   .6   .3       5.7       6.1
  Housing...........   .3   .5   .5   .6  -.1  -.1   .0       -.9       3.2
  Apparel...........   .5  -.3   .1  1.2   .5  -.1 -1.0      -2.4        .3
  Transportation....  -.7  2.0  3.8  1.7 -1.5  -.6 -5.4     -26.2       4.2
  Medical care......   .2   .2   .2   .1   .2   .3   .2       2.9       2.8
  Recreation........  -.1   .1   .1   .4   .5   .2   .1       3.4       2.2
  Education and
     communication..   .4   .4   .5   .5   .2   .1   .2       2.1       3.4
  Other goods and
     services.......   .5   .4   .4   .4   .2   .2   .3       2.9       4.1
 Special indexes:
  Energy............   .0  4.4  6.6  4.0 -3.1 -1.9 -8.6     -43.1      11.5
  Food..............   .9   .3   .8   .9   .6   .6   .3       5.8       6.3
  All items less
     food and energy   .1   .2   .3   .3   .2   .1  -.1       1.1       2.2

(HT: Mankiw)
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