August Inflation Flatlines

Économiste Monétaire

Annual CPI goes flat at -5.9%; CPIX: -1.8%, from -2% last month; and HICP: -2.4%, from -2.6% last month. There's positive monthly change in the CPI of 0.4% and 0.2% monthly change in the HICP.







01 Food and Non-Alcoholic Beverages;
02 Alcoholic Beverages and Tobacco;
03 Clothing and Footwear;
04 Housing, Water, Electricity, Gas and Other Fuels;
05 Furnishings, Household Equipment and Routine Household Maintenance;
06 Health;
07 Transport;
08 Communications;
09 Recreation and Culture;
10 Education;
11 Restaurants and Hotels; and
12 Miscellaneous Goods and Services.

Flamed Diving

Well, that's goodish news. I thought we were headed for possible double-digit deflation, at one stage. Although I'm not counting my chickens yet though. The CSI hasn't shown any major improvement.

http://www.esri.ie/irish_economy/consumer_sentiment/latest_consumer_sentiment/?

Any thoughts on possible causes?

nesf

Flamed Diving wrote: »

Any thoughts on possible causes?

Some of the decline was due to retailers slashing profit margins in an effort to stay afloat with a new highly price sensitive consumer. But there's a limit to how far these can drop quickly because commercial rates and rents don't change very fast.

nesf

nesf wrote: »

Some of the decline was due to retailers slashing profit margins in an effort to stay afloat with a new highly price sensitive consumer. But there's a limit to how far these can drop quickly because commercial rates and rents don't change very fast.

How very partial New Keynesian of you!

It will be interesting to see here if we get the same effect as has been seen in the US recently - where firms have been scrambling to increase efficiency so you see increases in both output and unemployment in the short run.