inflation reflation

Uh-Oh. Core CPI Posts First Decrease In More Than 7 Years

So much for reflation...

Well, what did we say on Thursday evening?

You need to keep a close eye on the bursting US auto bubble because while you’ll hear plenty of folks explaining how “contained” it is or how unlikely it is to become “systemic,” you’re going to see references to it popping up everywhere you look over the next six months.

Witness the just-released March retail sales:

  • U.S. March Retail Sales Fell 0.2% vs Est. -0.2%
  • Retail sales less autos unchanged in March, est. 0.1%
  • Retail sales forecast range -1% to 0.3% from 75 economists surveyed
  • Retail sales fell 0.3% in Feb.
  • Retail sales fell to $470.844b in March vs $471.865b in Feb.
  • Retail sales ex-auto dealers, building materials and gasoline stations rose 0.4% in March
  • Retail sales ‘control group’ rose 0.5% m/m in March
  • Retail sales ‘control group’ excludes food services, automobile dealers, building materials and gasoline stations
  • Auto dealer y/y sales rose $5.1b in March to $87.8b
  • Categories Rising (m/m out of 13) equals 7 vs 6 last month; 9 last March

Meanwhile – and more importantly in terms of the reflation thesis – we also got CPI on Friday morning. To wit:

  • CPI fell 0.3% vs est. 0%, according to the BLS (that’s the first decline in a year)
  • Forecast range from down 0.2% to up 0.3% from 79 estimates
  • Ex. food, energy down 0.1% vs est. 0.2% (that’s the first decline since January 2010)


  • CPI y/y rose 2.4% vs est. 2.6%
  • CPI NSA index level at 243.801
  • In Jan. 2018, BLS will revise CPI to utilize the 2010 Decennial Census.
  • Tax return preparation fees rose 2.4% M/m in March; 6.5% Y/y

And rounding out the data, average hourly earnings:

  • U.S. March Real Average Weekly Earnings Unchanged at 0% Y/y
  • Real avg. weekly earnings rose 0.5% M/m in March, according to the BLS.
  • Real avg. hourly earnings rose 0.5% M/m in March
  • Real avg. hourly earnings rose 0.3% Y/y in March

We’re not exactly sure that, when taken together, all of the above paints a very “reflation-ish” picture.


1 comment on “Uh-Oh. Core CPI Posts First Decrease In More Than 7 Years

  1. Curt Tyner

    So we have issues plenty of them, a debt ceiling battle with a possible government shutdown so what does congress do, “VACATION”. We are being represented by “status quo” lackeys who don’t think we actually pay their salaries so “just shut-up and sit down” as we cram this 1% agenda down your throat. America is a scam, from broken promises to broken dreams of freedom while the voting public fight over who should use a bathroom to walls that smell of desperation. We lost our conscience a long time ago, it’s time to get it back and tell your elected lackey to go fu*k themselves and run for office yourself.

    Our economy needs a lot of pain from all sides and no one has the “balls” for the ugly fights that are surly to come. Instead we wine about everything and we end up with …well….what we have now a bunch of self absorbed million/billionaires who only look out for themselves and their million/billionaire buddies. Guess what? We are not in that club so, WE DON’T COUNT except at election time. So dump ANYONE who doesn’t want to be part of a solution period, no slack, voters have more power than they think so start using it, today.

    A mushroom cloud of DEBT is spreading and it is not just in America it’s a global issue more now than ever before. One way or another it will be dealt with and it won’t be pretty, the sooner we get people who want to help solve this issue the better (read people, remember we have the internets). I will tell who will not feel the coming pain (I’m pretty sure you can guess) it’s the fools who set this nightmare in motion (moronic central bankers and their 1% buddies). Remember what 1%er himself Mitt Romney said in the 2012 Presidential election “I’m not worried about rich people, they are doing just fine” (ya think?).

    Finally, we are just beginning the downturn as more and more stores close and jobs are picked off at an alarming rate. Soon a major car company will announce a closing of a plant or two and more layoffs as the spiral continues. It is not a matter of if, now IT IS A MATTER OF WHEN.

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