If you just look at the topline numbers in the CPI report, it would appear that inflation was slowing.
The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent in March on a seasonally adjusted basis after rising 0.2 percent in February, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.4 percent before seasonal adjustment.And this decrease in inflation enabled real hourly wages to rise for only the second time in last 8 months, by a robust 0.4%. Sounds pretty good, and does this mean that we’re heading toward a sweet spot of wage gains combned with lower inflation?
A decline in the gasoline index more than outweighed increases in the indexes for shelter, medical care, and food to result in the slight seasonally adjusted decline in the all items index. The energy index fell sharply due mainly to the 4.9-percent decrease in the gasoline index. The index for food rose 0.1 percent over the month, with the indexes for food at home and food away from home both increasing.
Don’t bet on it. Notice that 2.4% increase in prices over the last 12 months? It’s the highest in a year, and later in the CPI report you see that prices for most items actually went up last month, including a boost to th "core" CPI.
The index for all items less food and energy increased 0.2 percent in March, the same increase as in February. Along with shelter and medical care, the indexes for personal care, motor vehicle insurance, and airline fares all rose. The indexes for apparel, for communication, and for used cars and trucks all declined over the month.Those year-over-year and core inflation figures came out 2 weeks after the Federal Reserve's Open Market Committee indicated in their meeting that prices and the overall economy would go up in the coming months. We found that out today when the minutes from that meeting were released today.
The all items index rose 2.4 percent for the 12 months ending March, the largest 12-month increase since the period ending March 2017 and higher than the 1.6-percent average annual rate over the past 10 years. The index for all items less food and energy rose 2.1 percent, its largest 12-month increase since the period ending February 2017. The energy index increased 7.0 percent over the past 12 months, and the food index advanced 1.3 percent.
All of the Federal Reserve's policymakers felt that the U.S. economy would firm further and that inflation would rise in the coming months, minutes of the central bank's last policy meeting on March 20-21 released on Wednesday showed.That likely will translate into rising interest rates from both the Fed and other places for the rest of 2018, and is similar to the outlook that the Congressional Budget Office gave on Monday.
The readout of the meeting, at which the Fed unanimously voted to raise borrowing costs by a quarter percentage point, also showed that policymakers were wary about the impact of the Trump administration's trade and fiscal policies….
Policymakers also see additional impetus from an economy in which the labor market is tightening, the dollar weakening and the stimulus from a $1.5 trillion income tax cut package and increased government spending yet to impact on the economy.
Also, see that March drop in gas prices of 4.9%? Don’t get used to that either, because Oil futures were trading at their highest levels in 4 years after our president
Prices began to rally as U.S. President Donald Trump threatened to fire missiles at Syria in response to a suspected chemical attack last week.That US crude figure is up nearly $5 a barrel since the end of last week, and I would think that would lead to higher prices at the pump in the coming weeks (well, that along with the typical Spring price spike).
Prices climbed further as Saudi Arabia's air defense forces intercepted a missile over the capital Riyadh on Wednesday, Saudi-owned broadcaster Al Arabiya said, after at least three blasts were heard in the city.
Brent crude jumped to a high above $72 a barrel, its strongest since early December 2014, after Trump's comments, while U.S. crude rose above $67 a barrel. Gold (XAU=) rallied for a fourth day as investors ditched risk-linked assets such as equities.
And if inflation is on the rise, and if wages do not continue to rise like they did in March, any good will that some people may have for Trump and the GOP have on the economy will melt away in the next few months. And it's not like things look good for those guys these days, even with the country having low unemployment and continued GDP growth. What if inflation and higher interest rates leads to THAT reversing as well?