April CPI: Inflation Fears Fade

The Labor Department is out with its reading on inflation for the month of April.  The Consumer Price Index was effectively flat and in-line with the Dow Jones target of unchanged. The core-CPI, which takes out food and energy, rose by 0.2% as expected against the Dow Jones consensus. Today’s data also ends 3 months of price gains on the headline number.

What was so unique about today’s CPI reading is that it was largely irrelevant unless the figures would have been shockingly off-base.  The price of commodities have been coming down across the board.  That drives down prices, and even the recent wholesale inflation measured by the Producer Price Index was signaling a lower tone of inflation.  The “Sell in May and go away!” stock market is not going to kindle up any new inflationary pressures for the time being either.

If you seasonally adjust the reading on a year over year basis, today’s headline inflation came to 2.3% and that is the lowest reading in months and months. The inflation hawks are just going to have to wait until more of all that printed up money makes it out to the market.

JON C. OGG