Disinflation Is (Probably) Over

Interesting market action today. The stock market is currently down about 0.9%. We had three big economic reports this morning. The first, and probably the biggest, is the U.S. Industrial Production which dropped 0.7% in April. This caught Wall Street off guard. The consensus was for an unchanged report. However, the March report was revised higher to a gain of 0.9%.

The initial jobless claims report dropped to 297,000 which is the lowest figure in seven years. This matches the report from May 12, 2007. Today’s report may hint of another good monthly jobs report. The May jobs report won’t come out until June 6.

The other report showed that consumer prices rose by 0.3% last month. I say this rather tentatively, but I think the evidence now says that disinflation is over. Please note that this isn’t quite the same as saying that inflation is definitely moving upward. It’s simply stopped trending down (I think).

Posted by on May 15th, 2014 at 10:39 am


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