The government reported this morning that consumer prices rose 0.4% last month which is what Wall Street had been expecting. The "core rate," which excludes food and energy prices, rose by 0.2% and that also matched expectations.
Inflation is clearly trending higher. To better illustrate this, below is the six-month trailing rate of consumer core inflation. I took the seasonally-adjusted numbers and annualized them for easier comparison.
That rate has been steadily climbing higher since it bottomed out at 0.27% in April 2010. For the most recent six months, core inflation has risen at an annualized rate of 1.77%. That's the highest in nearly two years. Still, it's not very high in historical terms, but trend is clearly toward higher inflation.
Inflations has often been a trend-sensitive data series. In other words, higher inflation begets even higher inflation. The numbers aren't a problem yet, but the trend should be a concern for the Federal Reserve.