Edwards comments on the market-based PCE price index as a deflation indicator—the index one that is based solely on actual prices paid in the market:
The market-based PCE, observes Albert Edwards, chief global strategist at SG Securities, "excludes prices which the statisticians have to invent!"
Edwards, in a new research note, points out that this purely fact-based inflation indicator is undershooting the better known ones, such as the regular PCE and the CPI. And, he adds, it is undershooting by more and more.
You can read the entire article here: http://www.marketwatch.com/story/could-we-be-heading-for-deflation-2014-03-11