Compared with last year, the consumer price index fell 0.4%, which is the first annual decline since August 1955. Most prices were even lower than that however, as a tax driven 11% rise in tobacco prices boosted the index higher than it otherwise might have been. The core CPI, which excludes things you eat and energy prices, actually rose a smidge–0.2%–in March. Overall, prices slid 0.1% last month.
The most important measure of inflation, the rise in the supply of dollars, increased last month. The fact that this has not yet appeared as a general rise in prices does not indicate that inflation is not already underway.
By the way, our own experience suggests that the divergence in cigarette pricing is driving multiple black markets, as smokers try to escape the taxes by ordering online or buying from smugglers bringing packs in from lower tax states.
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