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CONSUMER PRICES MAY DIP MORE THAN THOUGHT AS TRUFLATION INDEX TUMBLES
Consumer price inflation data on Friday is expected to show still reasonably elevated price pressures, with both headline and core prices expected to rise by 0.3% during January.
But an alternative inflation measure, the Truflation Index, suggests it may dip more than economists expect, according to Chris Low, chief economist at FHN Financial.
“There is some real-world evidence the negative demand shocks from tariffs and shutdowns may already be pulling inflation decisively lower,” Low said.
The Truflation Index, which is based on millions of observations taken from the web daily, does not perfectly track the Consumer Price Index or Personal Consumption Expenditures, Low notes.
“But big moves in Truflation anticipate big moves in the monthly indices. The move since mid-December is one of the biggest five or six of the past decade,” he said. "The Truflation Index points to a downside surprise tomorrow.”
(Karen Brettell)
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