May 31, 2010

David Rosenberg: We Are In A Disinflation Trend.

“For those who have ongoing problem with how the government treats the consumer price index, there is a metric that is tried, tested and true, which is the market-based core PCE price index (the core excludes food and energy). This metric was released yesterday and it eked a 0.3% QoQ annualized increase (basically flat) which was a record low for this particular data series. The YoY trend, depicted below, slowed to an 11-year low of 1.2% in Q1 from 1.7% in Q4 and 2.1% a year ago. The disinflation trend is unmistakable and augurs for income-based investment strategies.”

David Rosenberg

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