For the past 25 years, the U.S. has seen zero inflation in goods and 3% to 4% inflation in services.
Details: Goods are things you buy in stores and services are housing, health care and education, Deutsche Bank Securities chief economist Torsten Slok notes. The weight to goods in the CPI index is 1/3 and the weight to services is 2/3.
What's happening: Slok said in a recent note to clients...
"[There's] more openness to foreign trade holding down goods inflation, higher productivity growth in manufacturing than in services holding down inflation on goods, and higher growth in demand for services as per capita income rises and the population ages. "Looking ahead, for higher inflation to become a problem, we either need to see goods inflation move higher, for example because of a significant dollar depreciation, or we need to see even higher inflation in the costs of housing, healthcare and education."