The lower consumer price index with steady increase in core CPI will signify that the economy is quietly tilting towards recession
Peter Oberois
Oct. 18, 2006

The data is due at 8.30 AM. The market expects a 0.3% drop compared to a previous month’s 0.2% increase. The core CPI excluding energy and food should actually rise 0.2%. This translates into a scenario where the economy is going south.

The price deflator still points to the ability of the corporation’s ability in increasing prices. While there are some brand name related pricing power, across the board prices are going down especially when compared with the prices of commodities and real assets. The typical front-loading of the economy is weak. That means at the output level, underemployment and export of jobs to India and China is actually hurting the economy and pricing powers. At the same time the commodity inflation is making it difficult for corporations to increase revenue without increasing the customer base. The CPI data shows that the stagflation is getting slowly transformed into a recession.

The lower consumer price index with steady increase in core CPI will signify that the economy is quietly tilting towards recession
Peter Oberois
The data is due at 8.30 AM. The market expects a 0.3% drop compared to a previous month’s 0.2% increase. The core CPI excluding energy and food should actually rise 0.2%. This translates into a scenario where the economy is going south.
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