Is the deflationary environment morphing into inflation? Stay tuned.-Lou
Consumer Prices in U.S. Increase More Than Forecast
March 18 (Bloomberg) -- The cost of living in the U.S. rose more than forecast in February, easing concern that the inflation rate will fall below the Federal Reserve’s preferred level.
The consumer price index rose 0.4 percent after a 0.3 percent increase in January, the Labor Department said today in Washington. Excluding food and fuel, the so-called core rate climbed 0.2 percent for a second month. Fuel, clothing and automobile costs led the advance last month.
The gains last month pushed the annual inflation rate up to 1.8 percent, within the range that most Fed officials define as their objective. Some central bankers, including St. Louis Fed President James Bullard, have warned about the risk of deflation, a pattern of prolonged price declines that would hurt profits, make it harder to repay debt, and worsen the recession.
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http://www.bloomberg.com/apps/news?pid=20601110&sid=aUVU0DZzBXnw
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Hi and thanks for the blog! I wouldn't put too much on this one report .... if you look at a monthly chart of year over year changes we are still right near zero. This has been the case for the past three reports and is the lowest in years.
ReplyDeleteAs long as the M1 Multiplier (money velocity) remains below 1 it will be hard to get inflation. It shows everyone is saving or paying down debt.
But like you say, we will have to watch for changes.
Thanks again for your effort in putting together the blog. I recommend it and your radio show to all my friends!