By David Urani
Thursday we got a flat Producer Price Index, and today we got the July Consumer Price Index, which was up 0.2% for the month. That comes in line with the consensus estimate. ‘Core’ prices (excluding food and energy) also rose by 0.2%, in line with consensus as well.
It was a good change of pace from the 0.5% increase in June, which was driven by a 6.3% jump in gas. This time around gas was up 1.0%. Aside from energy, tobacco was up 1.4% and apparel was up 0.6%, partially offset by a 1.3% decline in airfare and a 0.4% decline for autos.
So inflation remains in check, if not low. And that is particularly interesting coming alongside St. Louis Fed member James Bullard who said Wednesday that he was a little worried that inflation is running too low. Of course, inflation is one of the key factors the Fed watches when considering monetary policy and the tame inflation would be one impetus to actually continue with QE.