November 25, 2020

There are many different deflators that are available.  This one is for gross domestic purchases which measures prices paid by U.S. residents.  It is the one measure of inflation that the Commerce Department talks about when it releases the GDP report.   It is our broadest measure of inflation and contains more than 5,000 goods and services.

The gross domestic purchases deflator rose by 3.5% in the third quarter after having declined by 1.4% in the second quarter.  Basically, prices recovered in the third quarter what they lost earlier in the year.

Excluding the volatile food and energy components this index rose 3.2% in the third quarter after having declined by 0.8% in the second quarter.

Stephen Slifer

NumberNomics

Charleston, SC