Currently, the GDP deflator is 1.8%, which hardly reflects the true rise in prices.
Over the same period the U.S. deflator rose by 45.3% and in the U.K. it was up 51.5%.
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The Fed has the core PCE deflator at 2.25% to 2.5% year-over-year in the fourth quarter of 2006.
Finally, the GDP deflator reported for 3Q2011 is expected to be only 4.3% higher than it was in 3Q2008.
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Judging by the CPI and the broader GDP deflator, actual inflation has already reached its highest level since 1991.
For example, does the GDP deflator number capture inflation of the stealthy kind?
The GDP deflator thus gives more weight to goods (such as capital goods) whose prices are falling the fastest.
The first and easy cut is simply Federal Interest Outlays as a Fraction of GDP divided by the GDP deflator.
The government decides to blame the deaf, dumb and blind kid and the deflator mouse, who saw the ruse all along.
On the inflation front, the Deflator came in at 0.3% vs. 1.6%.
During FY2010, NGDP grew by 4.47% (4th fiscal quarter over 4th fiscal quarter) and we experienced 1.63% inflation (based upon the GDP deflator).
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Representatives Mike Pence (Republican--Ind.) and Eric Cantor (Republican--Va.) have introduced legislation that would tie the cost basis of an asset to the GDP deflator.
He notes that with little fanfare the Fed recently switched its inflation benchmark from the Personal Consumption Expenditure deflator to the Consumer Price Index.
Inflation, as measured by the GDP deflator, increased at 1.7% annually.
Of course, the core CPI and the core personal consumption deflator (to be revised in July) argue that inflation excluding energy was somewhat contained through March.
Since the abandonment of Bretton Woods, the dollar has lost 77% of its value against the GDP deflator and 97% of its value relative to gold.
The GDP deflator reflects the prices of a basket of goods and services, the contents of which change over time to reflect evolving patterns of spending.
Inflation, as measured by the core personal-consumption-expenditure deflator (excluding food and energy) fell to 0.7% at an annual rate in the third quarter, its lowest since 1962.
Retailers see little scope for to raise prices - High Street prices, as measured by the retail sales deflator, rose only 0.1% in March compared to 0.4% in February.
We think low real interest rates, a weak dollar and plentiful U.S. and global liquidity argue that core inflation (both core CPI and the core PCE deflator) will continue rising, not subside.
According to the GDP deflator, a broad index of prices, deflation tightened its grip on the economy in the fourth quarter, with prices falling at an annual rate of 4.4% (see chart).
For the 18 years from a peak in the second quarter of 1994 to the end of 2012, the Japanese GDP deflator the broadest measure of the price of goods and services declined by 17.8%.
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The implicit price deflator of the non-financial business sector (services as well as manufacturing) fell by 0.6% in the year to the second quarter the first fall since the second world war (see chart).
Meanwhile, despite a headline GDP deflator that appears benign, the gross domestic purchases deflator (prices for what we buy) rose at a 4.2% rate in Q2 and is up 3.5% versus a year ago.
The implicit GDP price deflator was up at a 1.4 percent rate in the third quarter, 0.1 percent less than in the advance estimate and above the 0.7 percent increase in the second quarter.
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Unlike the goods and services prices index, the GDP deflator measures change In compensation of employees, operating surplus (including mixed income), and consumption of fixed assets arisen from changes in prices and nominal net taxes.
The Fed closely watches a cumbersome-sounding index, the core personal consumption expenditure deflator, for signs of inflation, and in the last few months, that indicator has dropped within the range Bernanke has been looking for--after three years of coming in above his range.
The economy's pace is producing clear inflationary pressure, with the core consumption deflator rising at an annualised 2.1% in the fourth quarter of 1999, the fastest for almost five years, and employment costs up by 3.4% in the year to the fourth quarter.
ECONOMIST: In due course it will stop. Until then, one stands in awe
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