Inflation Is Contained (Again)

 The the US CPI information for August was somewhat below expectations (BLS spider web page). Influenza A virus subtype H5N1 depression grade of CPI inflation is non likewise surprising; the exclusively existent surprise inwards inflation since the fiscal crisis is the lack of deflation, given the large sum of excess capacity inwards the economy.

The nautical chart higher upwards shows the annual charge per unit of measurement of alter for the CPI, too average hourly lucre since 1965. The unopen human relationship betwixt wage too CPI inflation is to endure expected; labour costs are a rattling large proportion of the toll of almost good; the almost notable exception is gasoline (which generates a pregnant component of the volatility inwards the CPI). The sum of slack inwards the labour marketplace would appear to betoken that it volition accept a long fourth dimension for inflation to perk up. Therefore, the principal directional driver for the bond marketplace volition endure the outlook for growth, non inflation data.
 
(c) Brian Romanchuk 2013