This report on Chinese Producer Prices for the month of August came out over night. Notice on the far right of this chart, prices were screaming higher late last year (at 13.5% year-over-year rate).
It was the hottest reading in 26 years. Meanwhile, the Fed was still playing the inflation denial game. This data was clearly telling us what was happening, and what was coming. And we have seen it.
But this number has since been falling like a stone, for eleven consecutive months — now at just 2.3%.
This rapid fall in price pressures in China aligns with the readings in the global PMI. This index in the chart below is derived from surveys of private sector manufacturing and service executives from 40 countries.
A reading above 50 is expansionary activity (improving). A reading below 50 is contractionary (deteriorating). It's well below 50.