The April 2017 Elliott Wave Financial Forecast described U.S. inflation as “subdued,” and indeed, the U.S Consumer Price Index declined in March for the first time since February 2016.
An April 14 Bloomberg article provides the major points of the data released by the U.S. Labor Department:
The consumer-price index decreased 0.3 percent (forecast was unchanged) following a 0.1 percent advance the prior month
From a year earlier, prices were up 2.4 percent (forecast was 2.6 percent) after a 2.7 percent gain
Excluding food and energy, the so-called core CPI fell 0.1 percent from the prior month, the first decrease since January 2010
Core rate was up 2 percent from March 2016
The CPI decline reflects cheaper motor vehicles, wireless phones services and apparel.
The headline CPI has also been negative at times in 2014 and 2015, as you can see in the chart below:
EWI anticipates that a deflationary trend will unfold much more vigorously after the stock market undergoes a significant reversal.
In the meantime, it’s good to educate yourself about deflation so that you are prepared before it strikes.