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A Different Way of Thinking About The Inflation Numbers
Inflation jumped higher in July as core-CPI rose 0.6%, well in excess of Wall Street’s expectation of a 0.2% gain. This surprise gain can be attributed to a pricing rebound compared to the negative prints earlier this year and a response to temporary supply constrictions. It certainly does not by itself indicate the U.S. economy is poised for a 70’s-style Great Inflation. That said, it opens up the possibility that disinflationary forces are less severe than initially perceived at a time the Fed has embraced the fight against disinflation. The pop in core-CPI was as impressive as the earlier collapse: chart The ... (full story)