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Twin threats from price inflation and deflation

Consumer price trends
Although core consumer price pressures remain subdued, food and fuel price inflation represent a growing threat to consumer spending—especially among lower-income households.

In the retail goods sector, the threat is from falling prices as much as rising prices. Deflation in (retail) goods excluding food and fuel worsened in the latest month (-1.0%).

As a result, retailers are particularly vulnerable to a growing threat that lower-income households economize on retail goods to pay for higher food and fuel prices. The immediate outlook—at least through the holiday—should not be hurt dramatically, however (see holiday outlook here).

Here is more on what the latest numbers say about:

These results are based on MacroSavvy’s analysis of latest Consumer Price Index data from the Bureau of Labor Statistics.

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