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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

April consumer inflation essentially flat

April consumer inflation dropped 0.1 percent, remaining essentially flat compared with March. Removing the volatile fuel and food categories, core inflation was unchanged.

Inflation is up 2.2 percent compared with April of 2009. Core inflation is up 0.9 percent.

The data are in line with forecasters' expectations.

As I reported yesterday, wholesale inflation continues to be a non-factor.

The Federal Reserve says it expects that inflation will remain low throughout at least the rest of the year. The lack of inflation has puzzled many economists, frankly, given that the government flooded the system with new dollars during the financial crisis of 2008. Each new dollar that is printed lowers the value of all the other dollars in circulation.

The best reason given for the absence of inflation is the continuing slack in the economy. Essentially, that means unemployment at 9.9 percent. When you have so many people out of work, it's hard to raise prices.

But as new jobs are added to the economy -- 290,000 new jobs were added last month -- businesses will regain some pricing power and inflation could become a factor.

By Frank Ahrens  |  May 19, 2010; 8:39 AM ET
Categories:  Data  
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Comments

Forget the fake inflation core rate. The ONLY accurate inflation rate includes food and energy. Whe you can go all month without food and energy, then you can use and rejoice in the "core" inflation rate.

Posted by: jwpc1 | May 19, 2010 9:16 AM | Report abuse

The simple fact of the matter is that the government manufactures phony baloney inflation numbers to cheat retirees. Sooner or later, though, the lies will come back to harm everyone. Look at the recent real estate bubble, for example. The Fed rationalizes zero interest rates based on the phony inflation numbers showing little inflation. And yet the real inflation rate is running at about 7% or more. Anyone who has been inside a grocery store lately surely realizes that the inflation rate is more than zero.

What happens when China figures out they've been duped? What happens to all the retirees and others who have been duped into buying long term treasuries? None of that matters, apparently, to the powers that be. They'll tell any number of lies, just to keep the Wall Street Ponzi scheme going.

Posted by: John991 | May 19, 2010 10:12 AM | Report abuse

"Removing the volatile fuel and food categories, core inflation was unchanged."

We all love it when those trivial items are excluded, right?

Like most folks, I've been busy buying lots of houses; food and gasoline, not so much.

Posted by: Bartolo1 | May 19, 2010 11:23 AM | Report abuse

We must throw out the incumbents! Elect people who see that the "inflation rate" is a complete fraud to reduce government costs. It's like computing the high school graduation rate without considering grades or test scores.

Why no polls asking people about this issue? Maybe because 95% would say leaving out food and energy is a joke.

Posted by: RichardinPasadena | May 19, 2010 12:07 PM | Report abuse

John991, don't forget to put on your tin-foil helmet so the government won't be able to invade your mind and read your thoughts...

Posted by: dfl1 | May 19, 2010 1:07 PM | Report abuse

Could be this flat price curve indicate a more serious economic event?
Debt is chasing demand. This is the real reason. Look at the record foreclosures and bankruptcies. This is not good news.

Posted by: peterroach | May 19, 2010 1:08 PM | Report abuse

Why do you publish this nonsense? All of us go to buy gas, up around $25 a gallon since January, food, *everything* up and going up further and clothing. The cheap rubbish produced as a result of this Administration's trading off textile jobs for foreign policy support, has all gone up 20%. And, our cable bills, cell phone bills, tires, EVERYTHING is up. My furnace broke last week, A year ago it was $100 for a just-plain-diagnostic. Now, it's $180. Inflation is racketing up, we see it with our own eyes, and you expect us to actually believe it isn't because of some press release out of Washington? Don't insult us! We're tired of being lied to and only a complete idiot believes in the government any more.

Posted by: mibrooks27 | May 19, 2010 1:59 PM | Report abuse

corrction - that senence about gas should have read cents, not dollar, for the increase cost of gasoline.

Posted by: mibrooks27 | May 19, 2010 2:03 PM | Report abuse

corrction - that sentence about gas should have read cents, not dollar, for the increase cost of gasoline.

Posted by: mibrooks27 | May 19, 2010 2:03 PM | Report abuse

corrction - that sentence about gas should have read cents, not dollar, for the increase cost of gasoline.

Posted by: mibrooks27 | May 19, 2010 2:03 PM | Report abuse

The core inflation rate is a better guage of the trend, because the prices of food and energy jump around so much--both up AND down. Some people criticize the use of the core rate because they assume that excluding food and energy always makes inflation seem lower; but that's simply not true. If you compare each month, you'll see that sometimes the core rate is higher than the overall rate and sometimes it's lower.

Posted by: ricktd | May 19, 2010 5:26 PM | Report abuse

People of the media are so ignorant about how the Fed cooks the inflation numbers to suit their agenda.

The press has gotten so lazy. First of all inflation is a measure of the change in the money supply, another manipulated number. Double the $$ in circulation, and your money has been devalued by 50%.

The CPI just reflects changes in a manipulated price level of selected goods and services.

Since most in this country have little $$ saved, they remain completely compliant regarding how the Fed has stolen their wealth.

The devaluing of our sovereign currency by the Fed is inflation. Get a book and read about it, Ahrens.

Posted by: wesatch | May 19, 2010 6:18 PM | Report abuse

Puzzled many economists? The ones hawking gold to the right-wing rubes? We are teetering on the edge of a depression and Deflation is what we have to worry about.

Posted by: Hopeful9 | May 19, 2010 11:11 PM | Report abuse

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