Agreed that the traditional basket of goods is not reflective of consumer spending these past three-plus months.
A related but whole 'nother issue is if on the other side of this, consumers'/companies' (spending) habits will have changed for good.
Will people be more cautious with spending because of the uncertainty of their jobs in the future?
Will they be less likely to eat in restaurants for safety/health issues?
Will companies make offsite workers a permanent thing thus reducing the need for office space?
Will offsite workers lack of travel needs depress all the businesses in the transportation sector? (i.e. cars, oil, airlines, etc).
Yes to any of these questions (and a hundred more) certainly depress prices.
Seeing the term disinflation or disflation being thrown around. This is probably driven by the the lack of a sales recovery in high ticket items and consumer habits changing / low confidence in recovery scenarios.
Keep in mind, right after the virus problem is solved in few weeks (!) the US will head into a vicious election cycle.
Both, the chicken and the egg are on life support and inedible. Which one is supply and which is demand... Which will recover first?
Yes with the lockdowns many of our worlds have shrunk, mine included.
So in the Philippines while inflation is down food price inflation increased because of problems getting produce moved and some food processing factories are closed.
There are also big issues with the supply chain for the electronics industry (the Philippines main export) so wherever that chain ends will face a fall in supply.
Consumer expectations of inflation have not changed much - but uncertainty is up.
Longer term has to be inflation - unless the Magic Money Tree is real.