There’s more data out this morning showing subdued inflationary pressures. The Commerce Department reported today that the price index for personal consumption expenditures increased at an annual rate of 0.2 percent for the 12 months ending January. The Federal Reserve has set a target of 2 percent annual inflation, so this is far below that target.
The Wall Street Journal reported it was the lowest rate of headline inflation since October 2009. Cheap oil played an important role in keeping inflation down, but excluding food and energy, consumer prices increased at the annual rate of 1.3 percent, which the WSJ reported showed resiliency of underlying price pressures.
Our Everyday Price Index, released last week, showed that despite an economy that may have entered a soft patch, there are still areas of the economy that are demonstrating that same resiliency. It’s worth a look if you haven’t seen it yet.