Inflation going away? Think again...

Inflation up 0.3% and 3.4% from last year...

The consumer-price index climbed 0.3% in December from the prior month and increased 3.4% from a year earlier, the Labor Department said Thursday. That compares with November’s 0.1% monthly gain and marks an acceleration from that month’s 3.1% annual increase.

Core prices, which strip out volatile food and energy items, rose 0.3% in December from the prior month—the same monthly increase as November and slightly faster than would be consistent with the Federal Reserve’s long-term inflation target of 2%. Core prices increased 3.9% from a year earlier, a modest slowing from November’s 4% annual increase. Thursday’s report isn’t likely to change the Fed’s near-term policy outlook.

This is simple math here. The target is 2% which is still a bit higher than we averaged under Trump (1.875%). However, 0.3% for one month works out to 3.6% if you calculate it out for 12 months. This is literally over 150% of what they are hoping for or possibly expecting. For us to be in line, we would need to be seeing no more than 0.2% most months with at least four months at 0.1%.

This increase is certainly more than just "slightly" faster/larger. I am curious why a percentage of increase is measured in speed (as in inflation is always speeding up or slowing down), but who am I to judge the media for how they word things. Either way, this is not a very good number, but probably not a number that will (as they suggest) change any Fed policy.

Bottom line... an honest assessment of this number suggests that we are still running hot and on place for closer to 4% and 2% right now. To report this as if it is a good thing (or at least a decent thing) is simply wrong.