CPI and Earnings and Current Account |

CPI and Earnings and Current Account

So let’s review:

CPI notched up 0.4%, mainly driven by a rise of about 4% in energy. Click here for a summary from CBS Marketwatch. Here’s the official BLS statement:
On a seasonally adjusted basis, the CPI-U increased 0.4 percent in November after rising 0.3 percent in October. The index for all items less food and energy was unchanged in November after increasing 0.2 percent in October.
In the meantime, real earnings were flat, or negative after taking into account the CPI:
(From BLS) Real average hourly earnings fell 0.5 percent from October to November 2009. This decline stemmed from a 0.5 percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) more than offsetting a 0.1 percent increase in average hourly earnings. Over the year real average hourly earnings decreased 0.1 percent.
At the same time, the current account deficit widened to $108 billion in the third quarter. At 3% of GDP, it’s still way below 2005 when it was 6.5% of GDP, so hopefully the trend is improving, although still ugly. http://www.marketwatch.com/story/current-account-gap-widens-in-q3-2009-12-16

All in all, certainly not inflationary on the surface, so the Fed, afraid of being labeled 37′ers, will have no motivation to move on interest rates.