by Frank James
President Harry Truman famously said what he needed was a one-handed economist to avoid the profession's tendency towards "on one hand, on the other hand" messages. But that doesn't address the situation where get two economists pointing in opposite directions.
Today's consumer price index report for March from the Labor Department either means inflation may be moderating or it may be ready to surge forward, depending on whom you believe.
The overall CPI rose 0.3 percent for the month, while core inflation, which subtracts food and energy prices from the index, rose 0.2 percent.
The annualized rate for total inflation for the last three months was 3.1 percent compared with the unadjusted 4.0 percent for the 12 months ended in March. Excluding food and energy, the annualized rate for the three months ending in March was 2.0 percent; the rate for the trailing 12 months was 2.4 percent.
Now, this looks like good news, like inflationary pressure just might be slowing. That's certainly the interpretation of the data offered by Bernard Baumohl, an economist and managing director of the Economic Outlook Group in Princeton, N.J.
By digging into the CPI data we think a credible case can be made that inflation is behaving as expected in a recession and starting to moderate. Pricing power becomes increasingly difficult to maintain when there is a slowdown in demand. Inflation may thus be approaching a critical inflection point, though we’ll need a few more months of data to be certain.
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Comments
Predicting precisely how 300 million people will try to react to multiple unknown world events may not be as easy as it sounds.
Posted by: whatnow | April 16, 2008 4:53 PM
I'm sure everything is just fine, just fine!, as long as you don't count fuel, food, and medical care.
Just fine! Repeat; Just fine!
Eliminate everything but the buggy whip and we can all retire rich, right Old Creaky?
Posted by: C.Morris | April 16, 2008 7:10 PM
I'll flail you good, Morris! You won't know what you were beat with. And get the handle right, no space.
Posted by: OldCreaky | April 16, 2008 7:54 PM
OldScreachy,
You and Reamer need some anger management, maybe some aroma therapy. Remember, in America you are never too old to get beat up.
Posted by: C.Morris | April 16, 2008 8:52 PM
I know what all of you need. And I can deliver it good. You'll thank me later for your baptism by fire. Especially you Morris, you look like you might actually enjoy it.
Posted by: The Reamer | April 16, 2008 9:43 PM
Hey Reamer, your id is showing.
Posted by: C.Morris | April 16, 2008 10:08 PM
wow reamer, looks like you got cmo's back up. does anyone remember just how these two met again? Haywood?
Posted by: crud | April 16, 2008 10:24 PM
Yo crud, I think it goes back to young guns in the military. Reamer is just dreamin' though, the Mo is on our team. Might have spent a few too many days on the river though, if you know what I mean. What do you think Captain?
Posted by: Haywood Jablome | April 16, 2008 10:31 PM
Right on Haywood, The Reamer ain't no country for old men. Straight shooter that C.Morris.
Posted by: Captain Obvious | April 16, 2008 10:36 PM
Twilight Zone music play out......
Posted by: C.Morris | April 17, 2008 8:54 PM