The US Bureau of Labor Statistics released March Consumer Price Index (CPI) data today, showing that inflation continues to be an issue for the US economy. Overall, prices increased 0.3% in March vs. February and 4% over the last twelve months.
Don’t be fooled by the so-called “core” inflation number which shows inflation of 0.2% and 2.4% respectively. The core number excludes food and energy items; two components which have seen the highest price growth and impact consumers the most. Inflation is a killer for economies, as higher prices weigh on corporate earnings and reduce the present value of future real cash flows.
More Housing Pain
Housing data out today also showed more of the same, as housing starts fell about 12% in March vs. February. March housing starts are also 37% lower than they were in March 2007. Good times.