CPI
Despite Falling Commodity Prices, Inflation Still Expected To Accelerate In 2011
Latest PPI month/month increase was +1.2%, however the latest report is a measure of inflation from mid March through mid April and does not include the impact of the plunge in commodity prices.
Inflation Pressures Becoming More Evident
All three PPI measures have their six month rates of change well above the 12 month rates, so the trend points toward even higher inflation ahead.
Inflation Pressures Becoming More Evident
All three PPI measures have their 6 month rates of change well above the 12 month rates, so the trend points toward even higher inflation ahead.
Look Out For Rising Inflation This Year
Given global economic recovery, and Fed action meant to stimulate the U.S. economy, we expect that inflation fires will heat up significantly in 2011.
Inflation Acceleration In 2011
By keeping interest rates at extreme lows and printing money, the Fed is trying to reflate, convincing consumers to spend, not save and investors to buy riskier assets.
Inflation Acceleration In 2011
Commodities are on fire, and it’s not just because of the weaker dollar. Commodity prices are signaling significant pass-through inflation pressures building.
Inflation Acceleration In 2011
We see the perceived deflation threat developing into commodity-based inflationary fears.
Inflation Acceleration Likely In 2011
Commodity Diffusion Index pointing toward higher inflation.
Mild Inflation, But No Deflation In 2010
We are maintaining our 2010 CPI estimate of +1.2%. (Core CPI +0.9%.)
Mild Inflation, But No Deflation In 2010
It may feel like a deflationary environment, but the CPI is not likely to end 2010 with a twelve month deflationary reading.
Year End Twelve Month CPI Deflation Reading Unlikely
Looking ahead to 2011, we are keeping a close eye on Housing, Food and Wages, which all could be bottoming out.
Current Deflation Fears Are Unwarranted
Don’t fear deflation. Leuthold historical studies show mild deflation can actually be a good environment for the stock market.
Inflation Tame
Looking ahead to 2011, we are keeping a close eye on Housing, Food and Wages, which all could be bottoming out.
CPI Tame For Now, 2011?
Gently rising CPI inflation at present can be best characterized as normal business cycle inflation.
Mild CPI Inflation Expected In 2010
The greatest danger in late 2010 and 2011 is monetary debasement inflation, not demand based inflation.
Mild CPI Inflation Expected In 2010
Mild CPI Inflation Expected In 2010 (+3.2%); Higher PPI Inflation (+6.0%)
Weak Dollar Could Continue To Contribute To Higher Commodity Prices
U.S. commodity prices are again trending higher, like they did in 2002, as the U.S. economy recovered. The weak U.S. dollar helped, and recent rally might not last.
Leuthold Commodity Diffusion Index Remains Negative
Like they did in 2002, as the U.S. economy recovered, U.S. commodity prices are again trending higher.
Mild Inflation Next Twelve Months
This transition from deflation to mild inflation will be a “numbers game” as late 2009 readings are compared against late 2008’s strong deflationary readings, driving the twelve month rate up.
Mild Inflation Next Twelve Months
By year end 2009, we expect the twelve month PPI to be back up in mildly inflationary territory.
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