Bending the Third Rail
Because We Should, We Can, We Do
Friday, March 16, 2007
Inflation Ex-Inflation
The Consumer Price Index came out today and was SURPRISE! above expectations, except of course when you eliminate everything inflationary from the measurement:
Given yesterday's eye-popping Producer Prices -- the 12 months ending in February, overall wholesale prices rose 2.5%, the highest reading since August 2006 -- there was some concern about today's Consumer Prices.

And with good cause: the headline number was plus 0.4%, higher than expected (0.3%). We are told there is "nothing to worry about here," though: Once we remove everything that has gone up in price, inflation remains contained. Core prices, excluding food and energy, increased only 0.2% in February.
Slowing economy, meet higher prices.