The Bureau of Labor Statistics (BLS) released the July Producer Price Index (PPI). Producer prices fell 0.1 percent for the month (+1.7 percent year-to-year). The July estimate compares to an increase of 0.1 percent in June, and a pre-report forecast of 0.1 percent. Lower prices for services were the major contributing factor. Total service prices fell 0.2 percent, trade service prices fell 0.5 percent and transportation and warehousing prices fell 0.8 percent for the month.

BLS also released the July Consumer Price Index (CPI). Consumer prices increased 0.1 percent for the month and 1.7 percent for the year. The estimates were on the lower end of the range of analysts' expectations. For the month, fuel oil (-2.0 percent), piped gas (-2.3 percent), used cars and trucks (-0.5 percent) and new vehicles (-0.5 percent) had the greatest price declines. Medical care commodities (1.0 percent), electricity (0.4 percent), apparel (0.3 percent) and medical care services (0.3 percent), had the largest price increases.

Inflation, as revealed in price indices such as the PPI and CPI, are closely followed. Cost-of-living salary and payment adjustments are often tied to changes in the CPI. The Fed has a target of 2.0 percent inflation—significantly above the current inflationary rate. Deflation in producer prices and very soft inflation in consumer prices increases doubts that the Federal Reserve will raise interest rates as fast as they previously announced.

Inflation and deflation are important. Although currently not an issue, they are closely monitored by analysts, policy-makers and decision-makers. Deflation always carries the risk of deflationary spirals; expectations of lower prices cause the postponement of purchases, which cause prices to spiral lower, which cause further declines in expectations, and the cycle continues. Profits fall, businesses fail and unemployment rises, which cause prices to fall still further.

Expectations of higher prices can also cause inflationary spirals; purchases are accelerated in anticipation of higher future prices, causing current prices to rise, which increase price expectations, and the cycle continues. If the central bank increases the money supply enough, the cycle can result in hyperinflation and the eventual collapse of the currency.

Even moderate inflation can be harmful to workers and those on fixed incomes. Inflation is a sly thief that decreases purchasing power and lowers the standard of living of many. Workers are happy with their salary raises unless they discover their higher income doesn't appear to buy as much as their lower income before. Savings account balances provide security to the frugal, until it is discovered that the inflation rate is far greater than the interest rate they receive.

Wise personal financial management requires the use of "real' (inflation adjusted) values. If inflation is 2 percent, your current income must increase by 2 percent to maintain your current standard of living. Switching employment, obtaining an extra part-time job or gig, reducing expenses to adjust to the loss in purchasing power, or a variety of other tactics can be taken to minimize any negative impacts and take advantage of any opportunities.

Kingdom citizens should likewise use real (kingdom) values in our daily walk, ministry, family and vocation. The sermon on the mount is the Lord's exposition of kingdom values. In the beatitudes, He tells us to be poor in spirit, to mourn, to be meek, to hunger and thirst after righteousness, to be merciful, to be pure in heart, to be peacemakers and to be willing to be persecuted. In exchange, He promised us that we will be blessed (happy) and that we will receive the kingdom of heaven, be comforted, inherit the earth, be filled with righteousness, obtain mercy, see God and be called the sons of God.

Blessed are the poor in spirit, for theirs is the kingdom of heaven.

Blessed are those who mourn, for they shall be comforted.

Blessed are the meek, for they shall inherit the earth.

Blessed are those who hunger and thirst for righteousness, for they shall be filled.

Blessed are the merciful, for they shall obtain mercy.

Blessed are the pure in heart, for they shall see God.

Blessed are the peacemakers, for they shall be called the sons of God.

Blessed are those who are persecuted for righteousness' sake, for theirs is the kingdom of heaven (Matt. 5:3-11).

In the Sermon on the Mount, the Lord also told us to be the salt of the earth and the light of the world (Matt. 5:13-16). We are to be obedient to the commandments (Matt. 5:19-20). He taught that our thoughts, words and actions matter (Matt. 5:21-42). As kingdom citizens, we are to love, bless, do good toward and pray for our enemies (Matt. 5:43-48).

The Lord Jesus told us to give, pray and fast; but not to be seen or heard by others. We're to have a heavenly perspective and seek His kingdom; knowing that our Father in heaven loves us and will provide (Matt. 6).

The Lord has promised that if we ask, we will receive; that if we seek, we will find; and that if we knock, it will be opened. But He also warned that we will be judged with the same judgment we use to judge others, and that small is the gate and narrow is the way that leads to life (Matt. 7).

From this day forward, let us recommit to living our life with kingdom (real) values. Our relationship with the Lord depends on doing the will of the Father (Matt. 7:21-23). Our heavenly Father is filled with love, our Lord is filled with grace and the Holy Spirit wants to guide us.

"The grace of the Lord Jesus Christ, and the love of God, and the communion of the Holy Spirit be with you all. Amen" (2 Cor. 13:14).

Dr. James Russell is a professor of economics at Oral Roberts University.

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