Latest CPI Numbers – What Inflation?

Latest CPI Numbers – What Inflation?

Thanks to good friend and fellow deflationist Carson for sending along the latest CPI numbers, which were released this morning.

Inflation?  Where?

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in April, the U.S. Bureau of Labor Statistics reported today.

Take away food and energy, and the deflation bird begins to crow louder:

The continuing stability of the index for all items less food and energy has resulted in an increase over the last 12 months of 0.9 percent, the smallest 12-month increase since January 1966.

Of course CPI numbers are always to be taken in context – with a heaping of salt.  These numbers aren’t published to help you and I – they are published to help the government look good.

Still, I’m a bit surprised to see such low #’s, given the massive “reflation rally” we’ve just experienced.

CPI is a trailing indicator, so it’s usefulness in making investing decisions is limited at best.  If you want to see where prices are heading, watch the commodity futures markets.  And if you’re lazy and want to really boil that down – just watch the price of oil.

Oil has rolled over like a dog over the past few weeks.  It may be oversold in the near term, but it’s trend is now DOWN.

Oil futures price chartPeak oil?  Maybe someday – for now – crude oil begins to roll over.

With oil heading down, I wouldn’t anticipate price inflation in the near term.