By Dean Baker
The Bureau of Labor Statistics reported that the overall CPI was flat for the second consecutive month in July, while the core index increased by just 0.1 percent.
There is literally no evidence of inflation anywhere in this report.
The overall CPI hasn’t shown an increase since March and is up just 1.2 percent since July of last year.
The producer prices indices show inflation is well contained at earlier stages of production with the finished goods index up by just 0.5 percent year over year and both the intermediate goods index and the crude goods index down from year ago levels.
Clearly the Fed has no reason to be concerned about inflation exceeding its 2.0 percent target any time soon.