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By New_Deal_democrat March 16, 2015 8:33 am
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February consumer prices may have declined by as much as -1.2%!

Last week I cautioned that we really needed to see what happened with in-(de-)flation for February before we panic about the -0.8% decline in retail sales. Over the weekend the Wall Street Journal 
( http://blogs.wsj.com/economics/2015/03/13/the-billion-prices-project-thi... ) showed dramatically why that is the case.

A private service called the "Billion Prices Project" scours the internet for price information.  It has a short track record, but has been excellent in forecasting the CPI number in real time.

According to the WSJ commentary, here is the recent month over month change in prices:

Prices declined as much as -1.2% at some point in February.

Here is the same information YoY:

The CPI in January was -0.2% YoY. Last February prices increased +0.4%. The Billion Prices Project data suggests that there will be a -1.2% CPI print for February.

If so, that would mean that *real* retail sales actually *increased* +0.4% in February.

It also has implications for real Q1 GDP.

Here is the Atlanta Fed's "GDPNow" graph, which has gotten a lot of play, including by me:

This looks dreadful.  But although it indicates that it is estimating real GDP, at this point it does not have the February inflation information.  This graph will look very different if February prices decrease by as much as -1.2%!

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