Monday, August 16, 2010

Everything But My Tuition Keeps Falling

A glance at the Empire State Manufacturing Survey reveals falling prices as the prices paid index shows disinflation and the prices received index hints at deflation:
"Both price indexes declined. Continuing its downward trend for a third consecutive month, the prices paid index fell 5 points to 20.0, suggesting that the pace of input price increases slowed. The prices received index, at -2.9, remained negative for a second consecutive month, a sign that selling prices were slightly lower in August."
 Additionally, the ISM manufacturing prices index is indicating a drop off in the rate of price increases:




The drop off in prices at the early production stages suggests that inflation will be lower down the line.  A look at the Producer Price Index later this week, under the category "crude nonfood materials less energy" should reveal any deflationary cost pressures.  

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