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The BLS reports: In February, the Consumer Price Index for All Urban Consumers increased 0.2 percent on a seasonally adjusted basis; rising 1.5 percent over the year, not seasonally adjusted. The index for all items less food and energy rose 0.1 percent in February (SA); up 2.1 percent over the year (NSA).

CPI vs Core CPI Percent Change From Year Ago

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CPI Items

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Assuming one does not eat or use energy, the CPI is up 0.1% from a month ago and 2.1% from a year ago. Curiously, the CPI for those who do eat and use energy, is only up 1.5% from a year ago.

To achieve these numbers, one has to believe medical care commodities are down 1.1% (drugs and equipment), while medical care services (your insurance policy, hospitalization etc) is up only 2.4% from a year ago.

Those looking to buy a house as well as those living in high rent areas will laugh at the notion that shelter is up only 3.4% from a year ago.

But if you believe all that, then inflation is benign sort of. There is one more test. Have your wages really risen as much as you are paying for things?

Mike "Mish" Shedlock