Consumer Prices Expected to Fall in 2009, Rise in 2010
The Graph of the Week looks at the forecast for consumer prices from the May 2009 NABE Outlook. From the survey:
Inflation will fall. The combined effects of economic slack and impressive gains in labor productivity will help to lower consumer price inflation. As measured by the price index for personal consumption expenditures, core inflation (excludes food and energy prices) is expected to decline to 1% by the fourth quarter of 2009. This is on-target with the Federal Reserve’s most recent central tendency prediction of a range from 0.9% to 1.1%. Overall inflation will be even weaker, with the “all-items” Consumer Price Index (CPI) up just 0.4% in 2009 (on a fourthquarter- to-fourth-quarter basis) as past declines in commodity prices feed through to the retail level. The low inflation rate will not persist into next year as the CPI is forecast to rise by 1.8%.
NABE members can read the whole report, and download the spreadsheet containing the data, here. There is a summary available to the public.