For the first time since 1955, the consumer price index fell on a year-over-year basis. Last month’s seasonally adjusted CPI slipped 0.1% for the 12 months through December, the Labor Department reports. On a monthly basis, the decline in CPI is more pronounced, falling by 0.7% last month–the third straight monthly decline.
Deflation, in short, is here. It’s been expected for some time, as we’ve been discussing in recent months, including here and here. The great question, of course: How long will it last?