View: atlanta-fed_sticky-price-cpi.png


The Atlanta Fed breaks the CPI into flexible and sticky prices. Flexible prices can move very quickly, like oil. Sticky prices are difficult to move, such as auto insurance and bus fare. Look at the collapse in sticky price inflation (blue line is the 3-month annualized to highlight the trend change). Biggest drop since the financial crisis.


That collapse looks a lot like the drop in Chinese PPI, from +1.6% in the month of December to -0.3% in May. But Chinese PPI is all flexible prices such as oil, steel, ag products, industrial chemicals. 6/16/17