Median CPI Annual Inflation Falls for the 18th Straight Month to a New Record Low of 0.6%

According to the Cleveland Fed's report today, the median CPI has increased by 0.60% in March over the last year, the 18th consecutive monthly drop in the median CPI annual inflation rate, and the lowest year-to-year inflation rate in the history of the Cleveland Fed's series back to 1984 (see chart above). In contrast, the regular CPI has increased by 2.3% over the last year (March 2009 to March 2010).

Historically, the median CPI has been 50% more accurate at gauging future inflation than the traditional CPI (based on the Cleveland Fed's research), and the median CPI is certainly not now showing any signs of inflationary pressures. In fact, a stronger case could be made for deflation right now than inflation, according to the median CPI.

Brian Wesbury and Scott Grannis disagree, and see inflationary pressures building.