What did I tell you back in 2009? Didn't I say that we could expect a new normal of around 10%? This is because a large part of the economy was being supported by unsustainable levels of debt and now that the debt has dried, we're getting the economy that we so richly deserve.
Expect this to continue as the economy continues to go through a long process of finding equilibrium between wages and costs. Deflation must still occur because wages are not going up.
If you're going to replace a good deal of where you get manufactured goods with a country that has much lower wages, then your standard of living must follow downward towards that of the supplying country--in this case, China.
I may end up teaching English in China next year. I don't know. I'll have to see how things pan out for me here in Saudi Arabia.