Inflation Rate Rises 0.02% in January, Wall Street Panics

My goal in life isn’t to deny forever that inflation is low and under control. But every time I try to get out, the Wall Street Journal pulls me back in:

Inflation Starts to Make a Comeback

A closely watched gauge of U.S. consumer prices offered fresh evidence that a long run of very low inflation is ending….A month-over-month measure of what households pay for everything except gasoline and food rose a seasonally adjusted 0.349% in January—the strongest one-month increase since March 2005….Though it signals a strengthening economy, price pressures are getting investors nervous.

They are literally pointing at one month’s worth of data to claim that inflation is coming to get us. Here’s the more normal annual inflation rate:

In January, CPI was flat and core CPI (excluding food and energy) was up by a tenth of a point. You can certainly make a case that CPI has rebounded from its unusually low rate in 2015 (which was mostly due to falling energy prices), but then you also have to acknowledge that core CPI has been on a downward trend for the entire past year.

If an inflation rate of 2.13 percent—up from 2.11 percent in December!—is spooking investors, we’re in big trouble. 2.13 percent!