The implicit pricedeflator 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).
The implicit GDP pricedeflator 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.
He notes that with little fanfare the Fed recently switched its inflation benchmark from the Personal Consumption Expenditure deflator to the Consumer Price Index.
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%.