U.S. Future Inflation Gauge Plummets to Six Year Low

Underlying inflationary pressures plummeted in September, according to the U.S. Future Inflation Gauge (USFIG) published by Economic Cycle Research Institute (ECRI). The value of ECRI's USFIG lies in its ability to measure underlying inflationary pressures and thereby predict turning points in the U.S. inflation cycle.

The USFIG dropped to 103.7 (1992=100) in September from 107.3 in August, while its smoothed annualized growth rate plunged to -17.8% from -13.9%. The gauge was pulled down in September by disinflationary moves in measures of commodity prices, labor market conditions, loans and interest rates, offset in part by an inflationary move in a measure of vendor performance.  Lakshman Achuthan of ECRI states:

With the USFIG diving to a new 76-month low, underlying inflationary pressures are clearly in rapid retreat.

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Comments

[Yankee Runn...:]

Maybe this is not such good news.. Are these figures based on the cooked inflation numbers given by the gov or does this mean that deflation is upon us?

2008 Oct 06 11:45 AM