It’s getting pretty hard to argue that America is at risk of high inflation, especially after today’s April consumer price data.
Despite some of the loosest monetary and fiscal policy America has ever seen, and even the current economic rebound, U.S. inflation appears more than merely under control… it’s dying.
The chart below shows the year over year percentage change for both the overall U.S. Consumer Price Index (CPI) and the ‘core’ index stripped of food and energy costs.
One can see that core inflation, in red, is at the lowest level it has been since at least 2000. Total inflation, in blue is also trending downwards. Thus at its current level, the CPI data isn’t quite showing deflation yet, but it is reporting clear disinflation (falling inflation). A few more months like April and we’ll see literal deflation.