Inflation may not be an overt threat at the moment, but it’s too early to stop worrying.
Today’s release of the consumer price index for April reminds that the pendulum is precariously balanced and may swing one way or the other in the months ahead. Correctly deciding which way it swings has become the all-important variable that will determine profit and loss for the foreseeable future among the more speculatively inclined players in the capital markets.
CPI’s 0.6% rise last month isn’t the highest we’ve seen in recent years, but neither is it the lowest. In fact, April’s advance, when put in context with recent history, exhibits many of the qualities that one associates with persistence. Stubborn upward persistence, we might add, noting that prices seem inclined to rise rather than play dead.
The trend is obvious when one looks at a chart of monthly 12-month CPI percentage change over time. Indeed, consumer prices are pushing higher over time. The trend unfolds in fits and starts, but it’s a trend nonetheless.
