Is deflation back?

Please see below the latest ‘Chart of the Week’ from State Street Global Markets


This week, Timothy Graf, head of Macro Strategy for EMEA at State Street Global Markets discusses the deflationary impulses in the US economy.


“A new metric developed by our PriceStats* team, measuring clothing and apparel sales at US online retailers, gives further evidence of the deflationary impulses in the US economy. Current trends in clothing sales and prices stand out in their extremity, in both absolute and seasonal terms, showing the weakness of demand in what is becoming one of the sharpest, deepest contractions in US economic activity on record. As such, the proportion of items classified as ‘on sale’** is the highest seen in the short history of this series. Clothing price changes in the month-to-date are also the weakest of any April we have previously captured and are very much in line with the deep seasonal discounting that is typically seen in January or July.


“In summary, deflation isn’t just an energy-related phenomenon. Some sectors that have supply chain and trade dependences are offsetting the weakness in others but the trend in headline inflation is clear and clothing price weakness threatens to bring core disinflation into vogue.”

*About State Street PriceStats®

PriceStats is a provider of high-frequency global inflation indices and purchasing power parities that offer insights into key macroeconomic variables. The indices are generated using software that scans the underlying code on public websites to capture the full array of products sold by online retailers, including food, beverages, electronics, apparel, furniture, household products, prescription drugs, and over-the-counter medicines. The technology monitors price fluctuations on roughly five million items sold by hundreds of online retailers in more than 70 countries. The PriceStats methodology is grounded in the extensive body of research of MIT professors Alberto Cavallo and Roberto Rigobon and their Billion Prices Project at MIT. Cavallo and Rigobon have leveraged this research and their expertise in monetary economics to develop the PriceStats indices.


** PriceStats observes whether the daily price of a unique item is more than 10 percent less than the modal price over the previous 90 days and, if so, classifies it as ‘on sale’. The number of ‘on sale’ items is divided by the total items available for sale.

Investing involves risk including the risk of loss of principal.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon.  You should consult your tax and financial advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.

The views expressed in this material are the views of State Street through the period ended May 4, 2020 and are subject to change based on market and other conditions.

This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those set forth in State Street's 2015 annual report and subsequent SEC filings.  State Street encourages investors to read the corporation's annual report, particularly the section on factors that may affect financial results, and its subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, May 4, 2020and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.

State Street Corporation One Lincoln Street, Boston, MA 02111-2900.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without State Street’s express written consent.

© 2020 State Street Corporation - All Rights Reserved


Expiration date: May 31, 2021

Tracking number: 3070288.1.1.GBL.RTL

Media Contacts

Contact a member of the State Street Media Relations Team.

Social Media

Business Wire NewsHQ℠
Cookie Settings