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Inflation watch: CPI figure higher than expected

A couple of weeks ago (October 1, 2007) I published a piece declaring inflation as a significant economic threat, just over the horizon.

Today the U.S. Bureau of Labor Statistics released its figure for the Consumer Price Index ("CPI".) The CPI is the US Government's official measurement of inflation. U.S. policymakers pay closer attention to another figure released by the BLS, the "Core CPI" figure, which removes housing and energy costs. Many economists see the Core CPI as depicting an unrealistic American economic experience (e.g. for whom are housing and energy costs not part of everyday economic life?)

The 0.3% CPI figure today was higher than the economists' consensus figure of 0.2%.

The bond market has responded this morning with lower prices, dropping yields on the 10-year US Treasury bill to 4.58% -- a rate which is up by more than a quarter since September 7, 2007 (the day on which the BLS released its unemployment figure showing the first net job loss in four years.)

For more on inflation, click here.

Posted by Jordan Graham on 10/17/2007 10:30 AM

Comments (2)

inflation, cpi, core cpi, bls, bureau of labor statistics

2 Comments on Inflation watch: CPI figure higher than expected

with $87.00 a barrel prices in oil, cost's are going to rise. I'm wondering though when the bottom will fall out in oil. I've read articles that have spoken about the puzzlement of Saudi traders who think this oil market is speculative. So perhaps CPI may rise for the next couple of quarters, but Oil will take it hard in the next 6 months, then you'll see a decrease in CPI next summer.

Finally, I don't think we'll see Bernake lowering interest rates any time soon. These numbers, coupled with the weaker dollar, may keep him from pushing forward with new rate cuts. Which means that ARM problem will continue to fester and get worse.

10/17/2007 10:41 AM

by Karl Christen Utah Mortgages~Mortgage Planning Expert (Envision Lending Group)

As a Realtor, I'd like to see the rates come down again. But, after reading your report and the first comment, I doubt they will. I have noticed grocery prices rising again. That affects everyone who eats... which is pretty much the living majority. Nice report. Thanks

10/17/2007 10:50 AM

by Robert Monk Florida Real Estate (100% Realty, Inc.)

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What does the graphic say?