Producer prices for finished goods declined (-2.8%) on a non-seasonal basis in October, a much greater decrease than expected. On a year-over-year basis, the rate of producer price inflation has declined from 9.8% in July to 5.1% in October. We can expect this decline to continue when this month's number is released in a month, because producer prices had increased 2.6% in November 2007 alone.

This is a slice of good news. Typical post-WW2 recessions have ended at roughly the time when both the rate of producer price and consumer price inflation are declining (check), producer prices are declining faster than consumer prices (almost certainly check), and producer price inflation is less than consumer price inflation (not yet, but maybe in a month). That means producer profits margins are increasing, which makes business expansions more likely.

Cross your fingers that the decline isn't simply measuring our trajectory towards a full-fledged deflationary spiral.