SOS Capacity Utilization

MV = PQ
Money Supply & Credit x Velocity = Price x Quantity Demand

Quantity Demand will determine the utilisation rate. If the utilisation rate drop, it indicates demand is slowing, which is shown by CPI. When CPI drop, utilisation rate normally drop as well.

When there is high unemployment rate, people is losing confident of the economy and due to the confidence level is low, the velocity of money will slow down, i.e. bringing the price down, which equates to deflation.

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Another tool measure whether the economy is going into deflation is the utilisation rate. If it drop, CPI will drop as well.