Inflation on its last legs.

• Position: Indiana Indicators

Judging from current information on wholesale prices as well as the recent performance of the bond markets, it certainly looks like inflation is on its last legs.

The prices that businesses pay were down sharply in August, falling in some categories by nearly a percent. Sluggish demand and a variety of special factors pushed the Producer Price Index for Finished Goods down in August for the fourth consecutive month, a 0.6 percent drop from July. It was the largest fall of the four months, and tobacco and energy were the biggest contributors--food prices actually were up 0.5 percent. To get some perspective on these statistics, consider that wholesale prices for finished goods were only 0.6 percent higher than they were a year earlier.

Meanwhile...