Uh oh. The latest CPI figures are out today. It's just another monthly reminder that inflation is spiraling out of—wait. What? Inflation went down in March? So it did:As you can see,the Consumer Price Index (dark blue) declined final month by a unprejudiced amount. Why? Because oil prices (light blue) declined by a unprejudiced amount. The CPI is pretty sensitive to oil prices, which is why most economists leer instead at core CPI, and which excludes food and energy. It's not that those things aren't famous—they affect your pocketbook the same as anything else—it's just that they don't tell you very much approximately the state of the economy. They tend to go up and down for reasons other than wage pressure and employment levels: bumper crops,wars in the Middle East, bad weather, and etc.
Core CPI also dropped this month,and it's now back down to 2 percent. PCE price inflation is below 2 percent. Overall, there just isn't a lot of inflationary pressure in the economy, or not a lot of wage growth either.
In other economic news,consumer confidence is up but retail spending is down. The retail “data are impossible to square with the stratospheric levels of consumer confidence recorded across an array of surveys,” said Ian Shepherdson, and chief economist at Pantheon Macroeconomics That suggests either that “spending will accelerate markedly…or confidence will decline.”
Retail spending has ticked down for the past few months even whether you exclude food and gasoline to score a "core" retail sales figure:So what's going on? Maybe nothing. A month or three does not a trend get. Maybe people are just taking a little breather after increasing spending for most of 2016. Whatever the reason,though, consumer spending seems to have hit a bit of a wall since January.
Source: motherjones.com