CPI up by 0.2% in April, better than the expected 0.3%, “Core” ex food and energy was up 0.1%, better than the 0.2% consensus. These numbers will soothe fears about runaway inflation and should add more fuel to the “V-shaped recovery” argument. Lower inflation will help stretched US consumers, and it suggests that the fed’s aggresive cuts haven’t overstimulated (at least yet) the economy. Bloomberg:
Companies are holding down prices to boost demand after the economy grew over the last two quarters at the slowest pace since the last recession. Smaller gains in core prices is welcome news for Federal Reserve policy makers, who last month said uncertainty on the outlook for inflation has “high.”
“The effects from slowing growth are starting to pull down inflation,” Zach Pandl, an economist at Lehman Brothers Holdings Inc. in New York, said before the report. “Companies aren’t in a good position right now” to raise prices.