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IPFS News Link • Economy - Economics USA

Rosenberg: If You Don't Think We're Staring At Deflation, Check This Out

As per the revised Q4 data, we now see that unit labour costs slid at a 5.9 % annual rate, the third decline in the past four quarters. On a year-over-year basis, unit labour costs plunged 4.7%, which is unprecedented (the pre-revised YoY trend was -2.8%). As Chart 1 illustrates, there is a tight 82% correlation between unit labour costs and the trend in headline inflation, which we can only assume is going to fall sharply in coming months and quarters.