Wednesday, March 16, 2016

Today's Inflation Report Puts the Core Rate At Its Highest Since 2008 (and 2012)

And the next report's headline number will include some of the feed-through from higher oil/gasoline and metals prices.
Have I mentioned TIPS?

From Investor's Business Daily:

Core Inflation Keeps Rising, But Housing, Manufacturing Improve Too 
The Federal Reserve isn’t expected to take action at the end of its 2-day meeting today, but policymakers have another slew of economic reports to review as they look to the future.

Consumer Price Index
Consumer prices fell in February, but underlying inflation trends continued to march higher, the Labor Department reported Wednesday. Meanwhile, single-family housing starts rose to their fastest pace since November 2007, while factory production advanced.

The consumer price index declined 0.2% in February, as energy costs plunged the most in seven years. Energy prices likely won’t fall further, at least in the short term, as gasoline prices rise off multi-year lows with crude futures stabilizing.

Core prices, which exclude food and energy, rose 0.3% for a second straight month. Year over year, core CPI climbed to 2.3%, the fourth straight month of modest acceleration and the highest in nearly four years.

The Federal Reserve is looking to see inflation at 2%, but its favorite price gauge is the core PCE deflator. The core PCE finally is starting to pick up, but is still significantly below 2%.
Service costs are driving the increase in inflation. with services ex energy inflation topping 3%, the most in more than seven years....MORE
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