It's a bait and switch story. What number do we emphasize? The scary number, about the deflationary monster? Or perhaps the core inflation number, which excludes food and energy, and shows a 12-month increase of 1.8%? Only two categories in the CPI fell: transportation and energy. Both are tied to the fall in oil and gas prices. Every other category increased.
What does this tell us?
Expect inflation, not deflation to prevail in the coming months.
2 comments:
They must eb kidding us on the oil price fall???? The price just went up, more than 60 cents over a 6 weeks period. Diesel is the cheapest fossile fuel byproduct, and yet the price for it is $3.09/gallon. Anyway, depenitely agree with you, expecting inflation. not too much, hopefully.
Well, oil prices have doubled since their lows earlier this year, but compared to $140+ a barrel, we're still feeling the effects of the price decrease in the CPI data.
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