Median CPI Annual Inflation Falls for 19th Straight Month to a Record Low of 0.5% = No Inflation
According to the Cleveland Fed's report today, the median CPI increased by 0.50% in April over the last year, the 19th consecutive monthly drop in the median CPI annual inflation rate, and the lowest year-to-year inflation rate in the history of the Cleveland Fed's series back to 1984 (see chart above). In contrast, the regular CPI has increased by 2.2% over the last year (April 2009 to April 2010).
Historically, the median CPI has been 50% more accurate at gauging future inflation than the traditional CPI (based on the Cleveland Fed's research), and the median CPI is certainly not now showing any signs of inflationary pressures. In fact, a stronger case could be made for deflation right now than inflation, according to: a) the median CPI, and b) the decelerating growth of the money supply, see this CD post from yesterday.
According to "inflation skeptic" Bob McTeer (former Dallas Fed president): "To repeat the obvious, because others won’t, money growth is almost flat. Flat money growth does not cause inflation—especially when we have enormous slack in the economy along with rapid productivity growth and declining unit labor cost. We may get inflation in the next few years, but, if so, it will be based on money growth yet to happen. It hasn’t happened yet."