Deflation's Back? Core Import Prices Tumble In December

While the world worries about inflation, US import prices (ex petroleum) printed a shocking 0.2% decline MoM in December (a big drop from recent monthly gains and big miss to expectations).

This is the biggest monthly decline since June 2016...

 

https://www.zerohedge.com/sites/default/files/inline-images/20180110_hk5.png

Year over year, import price gains rolled over...

 

https://www.zerohedge.com/sites/default/files/inline-images/20180110_imp2.png

 

Headline import prices also missed expectations, rising just 0.1% MoM in December (the weakest gain since July).

 

China's deflation export was stable...

 

https://www.zerohedge.com/sites/default/files/inline-images/20180110_imp1.png

Comments

sabaj49 spastic_colon Jan 10, 2018 8:59 AM Permalink

unless of course it is something you need - food, utilities, energy

or taxes(local) like property, sales, fees up cazoo

then it is 8.5-12% annually - just like the 12.8% hike in electricity - just $8.93 per month more - heck we can all afford that

 

won't even mention healthcare - their special at 20-50% annual inflation

In reply to by spastic_colon

LawsofPhysics Jan 10, 2018 8:46 AM Permalink

"Deflation"...

LMFAO!!!!

 

In a world with almost 8 BILLION people competing for the remaining resources that are required to maintain a decent standard of living there is no such thing!

 

Let's see a chart showing the purchasing power of the average wage relative to the cost of rent, food, utilities, education and healthcare!!!

LOL!!!

 

GreatUncle LawsofPhysics Jan 10, 2018 8:59 AM Permalink

LOP - No such thing as deflation or inflation now only how much the CB's will or will not create.

The liquidity creation is the biggest factor in inflation / deflation measurements now.

Just look how much liquidity was used to generate even that negative?

For 2018 we need $40T global liquidity injections now not a puny $20T.

Doubling every year ... going to be like Japan very soon.

 

In reply to by LawsofPhysics

Ron_Mexico LawsofPhysics Jan 10, 2018 10:47 AM Permalink

in the 70's we "imported" inflation in the form of much higher oil prices. Since at least 2000, we've been importing deflation in the form of artificially cheap imported goods from low-wage countries.  But even low-wage countries don't want to stay that way forever. We've been living in a low-inflation, low interest rate fool's paradise for quite a while.

In reply to by LawsofPhysics

Sonny Brakes Jan 10, 2018 8:55 AM Permalink

I could be wrong, but for inflation to be measured I would imagine that the price bid would have to exceed the price asked. If consumers can't afford the prices asked and forgo or delay their purchases then maybe you can get deflation. A low wage economy can only function if prices are low. Why is this so hard to comprehend?

Let it Go Jan 10, 2018 8:56 AM Permalink

This should be considered a continuation of the debate of whether inflation is really dead. The ECB and other central banks often claim deflation drives or allows their QE policy to remain and is central to their ability to stimulate. The moment inflation begins to take root or becomes apparent much of their flexibility in policy is lost.

The 2% inflation target central banks have deemed optimum is not valid. In the past, I have put forth the idea that inflation could rule the day even if central banks are unable to keep the wheels on the bus and the economy collapses. This powerful force also known as stagflation can devastate those improperly invested. The article below explores the basis of this theory.

 http:/The Inflation Or Deflation Debate Continues.html

LawsofPhysics Let it Go Jan 10, 2018 9:33 AM Permalink

That's a whole lot of mental masterbation.

Allow me to simplify it for you.  You have just about 8 billion people, and still growing, that require many resources just to simply survive, so there is plenty of real demand for real stuff. We either innovate or we will see a serious decrease in the population because there is no other solution to scarcity.

In a survival situation money is irrelevant because people will NOT sell at any price.

In reply to by Let it Go

pliny the longer Jan 10, 2018 9:30 AM Permalink

its so weird, this number prints moments after the whole china's gonna F ur world, rates spike thingy.  just so fukin crazy, the timing of it all 

 

i'll admit i was kinda worried there for a second, but now that deflation is back on the table, i know everything's gonna b ok 

moonmac Jan 10, 2018 10:57 AM Permalink

China just shut down dozens of steel mills for environmental reasons but surcharges on 304 stainless still dropped 10% in January which tells us it’s about overcapacity not air quality.