More Evidence of Deflation

Includes: DIA, QQQ, SPY
by: Donald Ingram

The Bureau of Labour Statistics (BLS) released data Tuesday morning that confirms my previous premise (see SA article) that deflation is indeed active in the economy and accelerating.

From the BLS:

From July 2008 to July 2009, prices for finished goods fell 6.8 percent, the index for intermediate goods decreased 15.1 percent, and crude goods prices dropped 44.8 percent, all of which are record 12 month declines.

The consumer price index is down 2.1% year over year.

The Federal Government current receipts are down negative 10+%; the rate of fall has not been this great in almost 60 years.

Federal tax receipts on corporate income is down 40+% year over year; not since 1930 has the collapse been this great.

State and local government sales tax receipts are negative for the first time since the beginning of World War II.

Corporate profits after tax have experienced the most severe collapse in history.

Net corporate dividends again have an historic collapse.

Compensation of employees wages and salaries accruals - go back to 1949 to find the same level!

Personal income is negative 2.5%, as is disposable personal income year over year.

Personal consumption expenditures continue to dive off the cliff, as does personal consumption for durable goods.

Total personal consumption expenditures is negative for the first time in modern history!

Final sales to domestic purchasers, negative for the first time in modern history!

Final sales of domestic products is, you guessed it, negative for the first time in modern history.

Personal savings rate continues to skyrocket, now approaching $600 billion, as the general populace continues to deleverage at a feverish pace.

Now, speaking just for myself, I DO NOT see any indication of inflation being present in the above statistics and facts.

What I do see is the start of a wage/price deflation spiral.

Disclosure: No position.