Chart 3
U.S. Businesses Have Experienced Significant
Deflationary Pressure On Output Prices
Since Late 2001

Year-Over-Year Change in Price Deflators
Date Nonfarm Business
Deflator
Core Personal Consumption
Expenditure (PCE) Deflator*
1989:Q2 3.9 4.21%
1989:Q3 3.6 3.84%
1989:Q4 3.4 3.88%
1990:Q1 3.4 3.80%
1990:Q2 3.4 4.25%
1990:Q3 3.7 4.63%
1990:Q4 4.1 4.50%
1991:Q1 4.3 4.62%
1991:Q2 3.8 4.17%
1991:Q3 3.6 3.94%
1991:Q4 3 3.92%
1992:Q1 2.4 3.94%
1992:Q2 2.2 3.83%
1992:Q3 1.7 3.44%
1992:Q4 2 3.29%
1993:Q1 2.1 2.79%
1993:Q2 2.2 2.73%
1993:Q3 2.3 2.66%
1993:Q4 2.1 2.40%
1994:Q1 1.7 2.12%
1994:Q2 1.7 2.05%
1994:Q3 2.1 2.38%
1994:Q4 2 2.26%
1995:Q1 2.3 2.59%
1995:Q2 2.2 2.53%
1995:Q3 1.7 2.28%
1995:Q4 1.5 2.27%
1996:Q1 1.3 2.04%
1996:Q2 1.2 1.87%
1996:Q3 1.3 1.74%
1996:Q4 1.7 1.83%
1997:Q1 2 1.97%
1997:Q2 2.2 2.11%
1997:Q3 2.2 1.98%
1997:Q4 1.9 1.73%
1998:Q1 1.3 1.54%
1998:Q2 0.8 1.39%
1998:Q3 0.8 1.52%
1998:Q4 0.7 1.57%
1999:Q1 0.9 1.50%
1999:Q2 1.1 1.45%
1999:Q3 1.2 1.42%
1999:Q4 1.4 1.48%
2000:Q1 1.7 1.71%
2000:Q2 1.8 1.80%
2000:Q3 1.8 1.76%
2000:Q4 1.9 1.79%
2001:Q1 2.1 1.94%
2001:Q2 2.1 1.78%
2001:Q3 2.2 1.65%
2001:Q4 1.5 1.88%
2002:Q1 0.6 1.52%
2002:Q2 0.5 1.70%
2002:Q3 0.1 1.96%
2002:Q4 0.7 1.65%

* The core PCE deflator excludes prices for food and energy components.

Source: Bureau of Economic Analysis and Bureau of Labor Statistics