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Goods Deflation Is Back
In the aftermath of a notable surge in inflation, Americans are witnessing a reversal with the onset of deflation, primarily observed in durable goods like appliances, furniture, and used cars. Although overall economywide deflation remains unlikely, economists anticipate a further decline in durable goods prices, potentially aligning with the Federal Reserve's 2% target by the second half of the upcoming year. The continuous year-over-year decrease in durable goods prices for five consecutive months has contributed to a drop in core inflation, measured by the personal-consumption expenditures price index, from 5.5% in September 2022 to 3.5% in October. The decline is attributed to improved supply chains and diminished demand, with the White House Council of Economic Advisers estimating that these factors account for roughly 80% of the reduction in inflation since 2022.
Fed Chairman Jerome Powell views decreasing goods prices as a positive outcome, signaling the effectiveness of higher interest rates in conjunction with smoother shipping in tempering demand.
Recent Highlights From The Earnings Reports
Hormel Foods Corp. HRL 0.00%↑ reported $0.42 EPS, missing the estimates by -6.67%.
Salesforce CRM 0.00%↑ reported $1.25 EPS, missing the estimates by -39.32%.
Kroger Company KR 0.00%↑ reported $0.95 EPS, beating the estimates by 5.56%.
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