CPI + PPI = Deflation

http://seekingalpha.com/article/106676-cpi-ppi-deflation

With today's negative print in the October PPI, producer prices have now declined for three straight months.  Since 1947, there have only been 13 other periods where the PPI declined for three months or more.  The longest streak was in 1997 when the PPI declined by 1.6% over a six-month span. 

In addition to the three-month losing streak in the PPI, tomorrow's CPI is also forecast to show a decline of 0.8%.  Like the PPI, if this were to occur, it would also mark the third straight month of declines.  Three-month losing streaks in the CPI are even less frequent than three-month declines in the PPI.  Since 1947, there have only been six other periods where the CPI declined for at least three months in a row.  The longest streak was from August 1948 through February 1949 when the headline CPI declined by 2.1% over a six-month period. 

Periods when both the CPI and PPI decline for three straight months are even more infrequent.  Since 1947, there have only been five other periods where both went down in tandem with each other, with the last period occurring in late 2001.  Given the infrequency of these occurrences, it's hard to believe that it was only two months ago that "upside risks to inflation" were still of "significant concern" to the Federal Reserve.