Core CPI declined for the first time since 1982. Sounds good - prices are falling during a period of high unemployment so that helps people stretch what income they have during tough times. However, it strips out energy costs, which are critical to anyone living in a building. Further, the calculation doesn't fully reflect how today's consumers spend money.
Many people will suggest we're heading for a deflationary environment and that inflation is no longer a concern. I continue to focus on the risk of inflation developing toward the middle to end of 2011 and believe it is a greater concern than deflation.
