More Deflationary Concerns

A major guage of economic health in manufacturing in New York State hit a record low in December, a Federal Reserve report (one of the earliest monthly indicators of what is to come for U.S. factory conditions) demonstrated, additionally noting a record drop in a key price gauge exemplifying slipping demand. Furthermore indications from additional reports have showed overall industrial output slid in November.

The New York Fed's "Empire State" general business conditions index fell to minus 25.76 in December, versus minus 25.43 in November. Economists polled by Reuters had expected a December reading of minus 27.25.

The series of reports precede government releases concerning consumer price data for November, which economists expect to indicate prices falling for the third time in four months. This alone should indicate that in the near term, deflation, not inflation, should be the biggest worry and that printing money and spending are becoming increasingly necessary as the US appears to be in the early stages of deflationary trends in prices and wages.