Price deflators giving conflicting signals over US GDP…

Interestingly the BEA prices indexes used to deflate nominal data to arrive at real GDP growth shows a deflationary trend in goods, an inflationary trend in services and residential and non residential structure investment.   Part of the larger than expected increase in Q2 GDP may be ascribed to the lower price deflators.

The fact that the PCE deflator is at historical lows (and both export and import good price deflators fell together in the latest quarter) should raise questions about about global demand dynamics: 

image

And more recently we see a significant pronounced decline:

image

image

image

And for the asset price components:

image

Leave a Reply