There were a couple of data releases this week that may have suggested (in that whispering-in-your-ear kind of way that only economic data can) the first hard evidence that we've passed the peak in this business cycle.
First, take a look at yesterday's new data on consumer prices. The overall rate of inflation on consumer goods has dropped sharply over the past couple of months, and even the rate of inflation on core goods (i.e. excluding energy and food items, whose prices are, as we know, far more volatile than most other items) seems to have stopped rising. The picture below illustrates.
If inflation (particularly core inflation) has indeed peaked and started dropping, then that might be a signal that the US economy has slowed its growth, causing inflationary pressures to diminish.
Meanwhile, the Federal Reserve Board released its estimates of production by US industry. The industrial production and capacity utilization measures for US manufacturing also seem to have topped out in recent months, as shown below.
Now of course, for both inflation and industrial production, it is entirely possible that those series will resume their upward climbs next month. But the fact that both of these series seem to be pausing at the same time does suggest that there may be a common explanation for both: a measurable slowdown in the US economy.
So it may well turn out to be the case that we will be able to say that the current economic expansion started losing steam in the middle of 2006. Time will tell.