Inflation! Debasement! March edition

hyperinflation

Last month I discussed the inflation! debasement! phenomenon: the certainty that, no matter what the data tells us, accelerating inflation and a depreciating currency are just around the corner.  Let’s take a look at the latest information, for March 2016:

  • Inflation: holding steady. Prices overall rose 0.9 percent since March 2015.  If we exclude food and energy prices, the Consumer Price Index rose 2.2 percent over the past twelve months.
  • Debasement: no sign of it yet. On a 12-month basis, the dollar appreciated about 3 percent when we use the real trade-weighted exchange rate. The nominal value of the dollar has fallen slightly over the past couple of months but there’s no clear trend in the data.

More good news was in the real earnings release.  The inflation-adjusted average wage rose 1.4 percent between March 2015 and March 2016.  That’s hardly roaring growth but it’s continuing a trend of slow but steady increases in real wages over the past 2 years.

No signs of inflation! or debasement! on the radar yet Captain Ryan.