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US Deflation Surges To Level Last Seen In October 2008

Tyler Durden's picture




 

This is what the ISM says of its "Prices" survey question:

The ISM Prices Index registered 35 percent in January, which is a decrease of 3.5 percentage points compared to the December reading of 38.5 percent. In January, 11 percent of respondents reported paying higher prices, 41 percent reported paying lower prices, and 48 percent of supply executives reported paying the same prices as in December. This is the third consecutive month that raw materials prices have registered a decrease, with the Prices Index decreasing a total of 18.5 percentage points over these three months. A Prices Index above 52.1 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) Producer Price Index for Intermediate Materials.

 

Of the 18 manufacturing industries, the only industry reporting increased prices in January is Printing & Related Support Activities. The 15 industries reporting paying lower prices during the month of January — listed in order — are: Textile Mills; Electrical Equipment, Appliances & Components; Plastics & Rubber Products; Petroleum & Coal Products; Paper Products; Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; Chemical Products; Computer & Electronic Products; Furniture & Related Products; Machinery; Transportation Equipment; Primary Metals; and Miscellaneous Manufacturing.

And here is how respondents who answered "Higher" or "Lower" prices looks like in context. In case it is not self-evident, the last time 41% of the ISM respondents, and rising, saw "lower" prices was in October 2008. We can't quite put our finger on what had just happened the month prior.

 

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Mon, 02/02/2015 - 11:49 | 5734810 Dr. Engali
Dr. Engali's picture

Deflation in the U.S is a funny thing. They tell me things are getting cheaper yet it costs me much moar to fill my grocery cart. My chocolate rations were increased form 30 grams to 20 grams last week . At least I have that going for me. 

Mon, 02/02/2015 - 11:51 | 5734847 nuubee
nuubee's picture

They also keep telling us that the gov't saved us money, by simply not spending quite as much as they said they would.

It's pretty much exactly the excuse a wife gives after she just cleaned out your checking account to improve her wardrobe..."But it was on sale, honey! On Sale!"

Mon, 02/02/2015 - 12:00 | 5734883 Silver Short Seller
Silver Short Seller's picture

Yes prices lower because of the fall in oil according to Ian Shepherdson.

Mon, 02/02/2015 - 12:03 | 5734896 NoDebt
NoDebt's picture

That's exactly right, SSS.

Mon, 02/02/2015 - 12:03 | 5734902 nope-1004
nope-1004's picture

Paging Eddy Quince.

Mon, 02/02/2015 - 12:29 | 5735028 Monetas
Monetas's picture

"Deflation surges" .... inflation craters !

Mon, 02/02/2015 - 12:35 | 5735052 Son of Loki
Son of Loki's picture

It's really, "Biflation" ... things you need like food and health insurance are skyrocketing while crap like clothing is plunging.

 

Anyone see the new ice cream cones or cups at McDs ? Thier now half the former size but still $1.00 to $1.29 depending on where you go. Basicially a 50% pop in price overnight.

 

Candy bars, bread, etc...all smaller sizes smaller boxes etc for the same high price.

Nefarious, yet the gruberized public has little clue or simply doesn't care 'cause someone else is paying for their EBT cards.

Mon, 02/02/2015 - 16:01 | 5735922 Hugh_Jass
Hugh_Jass's picture

Yeah, same thing with the Keurig cups. I opened a box today and it was two short. I was about to take it back when I looked at the package and it said 16 now instead of 18. I was a victim of shyterism! Shame on me for not reading!

 

It's everywhere now, pick up the "big" bag of chips. It's a "big" bag of air!

Mon, 02/02/2015 - 12:14 | 5734942 rccalhoun
rccalhoun's picture

utilites    up

car/home insurance    up

food       up

recreation/travel    up

repairs/maintenance    up

taxes      not down

gasoline     down

Mon, 02/02/2015 - 15:05 | 5735628 SDShack
SDShack's picture

Yep, I've been saying for weeks. Where the hell is all this deflation? Others to add to your list.... education up, rent up, home value flat, wages flat or down, savings down.

Mon, 02/02/2015 - 12:05 | 5734908 El Vaquero
El Vaquero's picture

That just tells you what some of the newspeak is of the era is.  Saving money does not involve mattresses, boating accidents or savings accounts with a healthy return.  Nope.  Saving money means finding some cheap Chinese crap that you don't need for less than the MSRP these days.  Never mind that sometimes stores will put a tag that says "Was $19.99, now $14.99, SAVE 25%!" on something that they always charged $14.99 for. 

Mon, 02/02/2015 - 11:53 | 5734856 LawsofPhysics
LawsofPhysics's picture

Yep, more to the point, deflation is a fucking myth.

Ask every family what their overall cost of living has been doing over the last, 10, 15, or 20 years.  Cetainly, we all expect to live longer than 20 years?

Mon, 02/02/2015 - 11:54 | 5734859 El Vaquero
El Vaquero's picture

Which is just a hint that should deflation really rear its head in the US, the Fed will likely overreact. 

Mon, 02/02/2015 - 11:55 | 5734865 JRobby
JRobby's picture

Expectations, ah yes, there is that most interesting of words.

Mon, 02/02/2015 - 12:19 | 5734895 LawsofPhysics
LawsofPhysics's picture

If the Fed really wanted inflation they would lend money to any bussiness/person with good credit at the same interest rate that they give the primary dealer banks.

 

This is in fact a "let the majority eat cake" monetary experiment.  We know how it ends.  I always get a kick out of asshats that talk about "deflationary pressure" in a world with finite resources and 7+ billion people (and growing)  all competing for a higher standard of living.

 

Loan money directly to innovative people, if the bankers are no longer willing to accept the risk (NO MORE BAILOUTS) then fuck them!!!

Mon, 02/02/2015 - 11:59 | 5734860 MonetaryApostate
MonetaryApostate's picture

The people really running the show invest in food, utilities, and assets that produce high ROI....

Just look at what the banks started buying up with all of that cheap money!

I'd be expecting food prices to soar during or after this political cycle...

Consumable Necessities > Precious Metals

(Would you rather own a utility company or a gold mining company?)

You can sell utilities infinitely, but gold only once.... (The supply runs out)

Mon, 02/02/2015 - 12:05 | 5734910 gaoptimize
gaoptimize's picture

A contrarian view: You can build generating capacity for 2 to 20 - 100 millions.  There is no amount of money that can create a gold deposit.

Mon, 02/02/2015 - 11:58 | 5734869 Honey Badger
Honey Badger's picture

It seems to me that when they talk about deflation, they are talking about the discretionary income of consumers but making is sound like they are talking about the raw prices of goods and services.

Mon, 02/02/2015 - 12:33 | 5735045 dimwitted economist
dimwitted economist's picture

i Fucking LOVE the Deflation in Gas prices!!!!

Mon, 02/02/2015 - 11:46 | 5734817 mtndds
mtndds's picture

Lets see deflation in housing and student tuition then I will believe it.  

Mon, 02/02/2015 - 11:51 | 5734834 therover
therover's picture

I will add meat, fruits, veggies and health care costs. 

 

Mon, 02/02/2015 - 11:55 | 5734863 Philo Beddoe
Philo Beddoe's picture

I will add taxation. 

Mon, 02/02/2015 - 11:54 | 5734853 JRobby
JRobby's picture

How about some MRI deflation?

Or a 2 for 1 kidney transplant deal?

Cialis, $1.00 a tablet

etc

Mon, 02/02/2015 - 11:56 | 5734864 CrimsonAvenger
CrimsonAvenger's picture

Cialis should be a lot cheaper, given the stiff competition in that market.

Mon, 02/02/2015 - 11:57 | 5734873 Temporalist
Temporalist's picture

It must have been hard on you to come up with that doozy.

Mon, 02/02/2015 - 12:10 | 5734935 fuu
fuu's picture

That was just about the most dysfunctional erection of a pun I have ever read.

Mon, 02/02/2015 - 13:00 | 5735168 Hulk
Hulk's picture

A 4 hour erection can be licked !!!

Mon, 02/02/2015 - 13:45 | 5735347 Quinvarius
Quinvarius's picture

So, in this business climate, based on these inputs, is it more or less expensive to operate a weiner stand in a retirement home?

Mon, 02/02/2015 - 11:48 | 5734821 ejmoosa
ejmoosa's picture

Overall demand is falling.

But the prices paid for those of us that can afford to buy are paying more and getting less.

Unfortunately those elite economists that generate these reports cannot grasp this simple concept.

Mon, 02/02/2015 - 11:48 | 5734822 IronShield
IronShield's picture

What you own will decrease in price, what you need will increase.  Class dismissed.

Mon, 02/02/2015 - 11:48 | 5734829 SheepDog-One
SheepDog-One's picture

Inflation is getting the air let out of it, go ahead, raise rates LOL.

Mon, 02/02/2015 - 11:50 | 5734836 j0nx
j0nx's picture

Not seeing this at all. Sorry. Incomes are stagnant and prices are still high on goods. There has been little to no price defaltion anywhere that I can see.

Mon, 02/02/2015 - 11:56 | 5734868 ZH Snob
ZH Snob's picture

absolutely.  deflation is as absent (or present) as inflation (according to govt stats).

Mon, 02/02/2015 - 11:52 | 5734843 starman
starman's picture

Let the 50% and 75% off retail game begin.

Mon, 02/02/2015 - 11:55 | 5734858 Philo Beddoe
Philo Beddoe's picture

Watch out for an outburst of electrical fires and disability claims. 

Mon, 02/02/2015 - 12:33 | 5735046 NotApplicable
NotApplicable's picture

Been waiting on that since 2007.

Mon, 02/02/2015 - 11:53 | 5734846 Refuse-Resist
Refuse-Resist's picture

Bull fucking shit.

Deflation in what? Milk? Beer? Cigarettes? Weed? Food? Car parts?

When smokes go back to $2/pack and when I can score a 12 pack of Schaefer for under $6, then I'll believe it. Otherwise it's bullshit as far as I'm concerned.

Since I don't any assets (the type that have massively inflated of late) all I see is the cost of everything going up either directly or stealthily (smaller package/higher price).

Mon, 02/02/2015 - 12:00 | 5734886 El Vaquero
El Vaquero's picture

For the smokes, a lot of that price hike is taxes.  Probably the case with beer too, but it certainly is with smokes, and the amount varies state to state.  Their prices are a whole other animal from prices on other things.  If you smoke, and you have a rez nearby, go to the rez.  I don't smoke, but as I understand it, they're 40% or so cheaper on the rez here, and I'm sure that those indians are taking in a higher profit margin than the gas stations off the rez.

Mon, 02/02/2015 - 11:53 | 5734854 Spungo
Spungo's picture

We should buy Bear Stearns to prevent it from collapsing!

Mon, 02/02/2015 - 11:54 | 5734855 ImReady
ImReady's picture

Obviously due to the snow in the midwest  this weekend...sheesh!

Mon, 02/02/2015 - 11:55 | 5734861 papaswamp
papaswamp's picture

If they could just deflate housing and healthcare costs, we'd be onto something...

Mon, 02/02/2015 - 15:35 | 5735784 Village-idiot
Village-idiot's picture

Be patient. It's coming.

Mon, 02/02/2015 - 11:59 | 5734867 noben
noben's picture

Deflation? Must be the fault of the NE Patriots, no doubt.

(As if both teams didn't play with the same ball. Somebody needs to... 'get a grip'.)

Mon, 02/02/2015 - 12:34 | 5735054 NotApplicable
NotApplicable's picture

Ummm... dunno about the Stupor Bowl, but in all of the other games, the teams never play with the same ball. They each use their own balls on offense.

Please try harder next time you attempt snark. Frankly, this is embarrassing.

Mon, 02/02/2015 - 12:58 | 5735164 JimBowie1958
JimBowie1958's picture

Actually, the two teams use their own set of 12 footballs. They dont share the same ball.

As to the OP, deflation in macroeconomics is entirely different from deflation at the store shelf. I dont understand why they use the same word for these different affects.

Mon, 02/02/2015 - 11:59 | 5734874 gaoptimize
gaoptimize's picture

Bloomberg shows Baltic Dry Index at 608.  May be below 600 by end of the week.  I feel the fear, and pricing and purchasing decisions driven by fear, rising.

Mon, 02/02/2015 - 14:20 | 5735477 Martial
Martial's picture

It already is...today's print was 590

Mon, 02/02/2015 - 11:59 | 5734877 madcows
madcows's picture

I'm sorry, Deflation in what?  Gas?  OH.  OK.  The price at the pump went down.  Um... what about food, clothing, housing, healthcare and tuition?  Yup.  THROUGH THE FUCKING ROOF!  Deflation is a bunch of Fucking Bullshit!

My income has gone up and my savings rate has gone down.  Every Fucking Year it's the same fucking game show.  How the Fuck am I going to cut another expense in order to keep up with inflation.  Go Fuck yourself FED.  Quit Fucking printing me into bankruptcy.  GoDamN Fucking Cunts!

Mon, 02/02/2015 - 12:25 | 5735017 redd_green
redd_green's picture

Spot on, madc, spot on.   

Mon, 02/02/2015 - 12:36 | 5735060 NotApplicable
NotApplicable's picture

EBT will ensure that food prices never go down.

Mon, 02/02/2015 - 12:00 | 5734882 quaBeing
quaBeing's picture

.

Mon, 02/02/2015 - 12:01 | 5734893 quaBeing
quaBeing's picture

i noticed something.

it's probably nothing but,

 

it seems that everyone keeps saying the same thing over and over,

almost as if,

you bitch long enough,

to the same audience over and over,

 

eventually they will let you out of the insane asylum.

 

can't say that i agree with that approach,

sorry.

Mon, 02/02/2015 - 12:38 | 5735067 prefan4200
prefan4200's picture

So you're bitching about the bitching.  So you do belong here after all,  whether you realize it or not.

Mon, 02/02/2015 - 12:06 | 5734900 buzzsaw99
buzzsaw99's picture

yeah, deflation.

 

1) i noticed the price of my 12 oz "pound" of bacon went down last week. /s

3) jack daniels now comes in a plastic bottle and tastes like cheap popov (that is to say two day old unfiltered dog shit (not that i really know what that tastes like)).

Mon, 02/02/2015 - 12:09 | 5734923 El Vaquero
El Vaquero's picture

JD comes in plastic bottles now?

Mon, 02/02/2015 - 12:12 | 5734933 buzzsaw99
buzzsaw99's picture

in smaller amounts at least. (pint, half pint). i swear that shit gave me a chemical burn on my tongue last week. harsh as hell. i am going to buy a case of some very old scotch and some very old whisky soon before all quality everywhere is completely unavailable.

Mon, 02/02/2015 - 12:15 | 5734944 Ignorance is bliss
Ignorance is bliss's picture

I like Aberlour and MaCallan and both have increased over the last year by about 15%. They are both just about out of my price range now.

Mon, 02/02/2015 - 12:23 | 5734988 buzzsaw99
buzzsaw99's picture

I used to really like Pinch. Have been drinking JD for years though because of the cost savings and because I like Pinch a little too much if you know what I mean. Seriously though, I am going to invest in a quality case of american bourbon and a case of scotch whisky soon. Some things are worth paying for.

Mon, 02/02/2015 - 12:47 | 5735107 sandlapper
sandlapper's picture

Basel Haydens or Blanton's if you want a good top shelf bourbon for celebrating.  Maker's Mark is probably the best quality for the price though.

Mon, 02/02/2015 - 12:23 | 5735003 the grateful un...
the grateful unemployed's picture

they pulled that popular brand of cinnamon whiskey because it had a component found in anti-freeze? if JD seems to of lesser quality it may follow other consumer brands which go through intense marketing campaigns to build a loyal customer base, after part onw of the program is complete they cut the quality and rake in the profits while their customers take a while to figure it out.

Mon, 02/02/2015 - 12:09 | 5734925 Rubbish
Rubbish's picture

For the love of God, lower the cost of Ice Cream. A man cannot live by bread alone. 1.5 Qt size me, no fuck you, I want a half gallon.

 

Gold Bitchez...I pick up pennies

Mon, 02/02/2015 - 12:11 | 5734927 ak_khanna
ak_khanna's picture

Worldwide deflation at the world's doorstep despite all time low interest rates and wholesale money printing in the form of QE.
The prime reason is the velocity of money is slowing at a much faster rate than the bankers can print money as this is not flowing into the real economy and creating jobs.

Any other arrows left in the quiver of the clueless or ulterior motivated central bankers?
Time to accept reality and act accordingly.
 
http://www.marketoracle.co.uk/Article40231.html

Mon, 02/02/2015 - 12:14 | 5734951 koncaswatch
koncaswatch's picture

Deflation is in tradeable paper assets... that is where the fear lies. The discussion is rarely about where we live; retail.

Mon, 02/02/2015 - 12:38 | 5735065 wonderatitall
wonderatitall's picture

i agree, but im blaming bush, and the old guy and romney and atms 

Mon, 02/02/2015 - 12:24 | 5735005 redd_green
redd_green's picture

Deflation my a$$.   go get your car fixed, or a tooth drilled or buy groceries, or get your front porch fixed.   Deflation is a load of horse puckey.

Mon, 02/02/2015 - 12:39 | 5735077 NotApplicable
NotApplicable's picture

Insurance is paying me $3k to replace the front quarter-panel and passenger door skin on my 12 year old civic.

I will be in the junk yard looking for a bargain.

Mon, 02/02/2015 - 15:20 | 5735710 Village-idiot
Village-idiot's picture

The costs you're talking about is mostly due to labour costs, which are going up mainly because of increases in taxes and other costs to employers.

Raw material costs are going down.

Mon, 02/02/2015 - 13:14 | 5735219 optimator
optimator's picture

What next when you're in this position FED/Banksters/Liars?

Take a page from history, teill the public you're working on "Miracle Weapons" and will shortly solve everything.  For awhile.  

Mon, 02/02/2015 - 13:25 | 5735264 badger10
badger10's picture

I believe when they talk deflation they indicate commodity prices such as copper and grains. Takes awhile for that to filter into lower retail prices.

Mon, 02/02/2015 - 13:33 | 5735306 Chad_the_short_...
Chad_the_short_seller's picture

Time to inflate oil back to $150. You boys and girls better get long some UCO calls and some UWTI. You can get rich off the move back up.

Mon, 02/02/2015 - 13:53 | 5735375 brushhog
brushhog's picture

I bought some good farm land 5 years ago. I raise our food ( veggies, lamb, rabbit, dairy ), we heat 100% with wood cut from our lot, living out in the country means less to do and less to spend on, we make our own entertainment. Looking into solar so I can cut the cord ( so to speak ) on the power company. Thats the only 'deflation' in rising costs the average person is ever going to see....the kind you make yourself.

Mon, 02/02/2015 - 16:10 | 5735960 fremannx
fremannx's picture

I find it interesting that so few people understand how deflation affects the stock market. People seem to think that the vast majority of market participants, investors and traders alike, must sell off their holdings for a stock market crash to occur. Nothing could be further from the truth.

http://www.globaldeflationnews.com/it-only-takes-two-to-tango-everyone-e...

Do NOT follow this link or you will be banned from the site!