Inflation is running tame, or at least within acceptable guidelines of inflationary targets. The Labor Department has reported that February consumer prices rose by +0.4% on the headline data. The Core CPI which eliminates food and energy rose by a mere +0.1%.
The expectations we had tracked were +0.4% on the headline and +0.2% on the core rate of inflation. These are month-over-month figures.
On an year-over-year basis, the headline inflation is up 2.9% and the core inflation was up 2.2%. After yesterday’s data on wholesale inflation from the Producer Price Index today’s data should not really be a surprise.
It generally takes a few months of inflation at the wholesale level to be fully passed down to the consumer level. There are implied lags from the time of production and contracted prices that factor in, plus many retailers just find that they have to eat higher costs to keep the prices lower for consumers.
JON C. OGG
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