Thursday, March 13, 2014

Are you ready for deflation? - Brett Arends's ROI - MarketWatch

Are you ready for deflation? - Brett Arends's ROI - MarketWatch: "Forget the consumer price index published by the U.S. Department of Labor. Forget the personal consumption expenditures price index published by the U.S. Department of Commerce. Look, instead, at the market-based PCE price index—the only one that is based solely on actual prices paid in the market.

It has been tumbling alarmingly, sinking in the fourth quarter of last year to an annual inflation rate of just 0.8%."

The market-based PCE, says the Commerce Department’s Bureau of Economic Analysis, is “based on market transactions for which there are corresponding price measures.” That means, the Bureau adds, that the market-based PCE “provides a measure of the prices paid by persons for domestic purchases of goods and services.”

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