Lowest in four years…
The latest data from the Bureau of Labor Statistics showed that consumer prices increased 2.3% over the prior year in April, a slowdown from March’s 2.4% and below economists’ forecast for 2.4%. This marked the lowest annual increase since February 2021, before a large increase in inflation sparked a Federal Reserve interest rate hiking cycle.
DB2
That is great news. Surprising but I will take it.
Good news, but let’s keep this in perspective. The annual rate is the lowest in four years. The monthly rate is not. The only reason the annual rate is the lowest it has been in four years is because the high(er) rates from last year (and prior) have now fallen off the rolling calendar.
For example, the annualized CPI in April 2023 was 4.9%. Last month was also was also the lowest in four years. February probably was as well. At this point, it isn’t a high hurdle to overcome.
That is true but if you look at the chart going back to 2018, the CPI is almost at the same level. That is good. We have the core quite a bit higher. Now the Tariffs will start showing up in a month or two. Let’s see what that is then but for now I am happy with this.
Exactly. The higher inflation of the last four years is fading into the past. We all remember transitory inflation. Well, part of it was and part of it wasn’t. That last $2 trillion package in March 2021 (just four years ago) was way too large.
DB2
Well then you are not going to like the 4 Trillion over 10 year tax break they are trying to pass now.
We shall see, although tax breaks tend to be less inflationary because of the different effects on consumers, producers and various income levels. There is also the very large difference in the time dimension.
DB2
LOL, That is funny. So it isn’t the deficit that has you worried but the inflation. Well the inflation has come down so it looks like the 2 trillion package was to large after all. LOL