Looking Good

Today’s inflation reading was amazing—both CPI and core CPI. This is the third straight month of zero or falling inflation. All those inflation hawks circling the sky out there—desperately searching for a rise in consumer prices—well, they just got bit in the rear.

Take a look at the last three big reports:

Retail sales: Wednesday’s beautiful retail number handily beat market forecasts. The strong showing demonstrated (once again) the remarkable resiliency of U.S. consumers. Incidentally, this development takes any hypothetical zero Q4 GDP off the table. Sorry permabears…

Employment: Last Friday’s strong employment report blew away Krugmanite recessionists. The November jobs report was stronger than expected and increased by 132,000. Unemployment remains at a historically low 4 ½ percent. There’s no recession in these numbers.

Inflation: Today’s flat report is another bright, shining, example of why the U.S. economy remains the greatest story never told. CPI is up just 2 percent in the past year, following a 0.5 percent decline in September and October. Core inflation has risen at a 1.6% annual rate in the past three months, the slowest growth since June 2005.Inflation appears contained.

Looking good - looking very good...