The Facts
On Wed., the US Labor Dept. reported that the Consumer Price Index (CPI), a closely watched measure of nationwide price growth, rose 8.3% from a year ago - a drop from the 8.5% annual increase in Mar.
This marks the first dip in the pace of inflation after eight months of continuous price increases, but it was still higher than the 8.1% rate that many economists had predicted.
The Spin
Narrative A
Although the country's struggle with inflation is far from over, this is heartening news that suggests the worst has passed. Markets can breathe a sigh of relief as they prepare for a long, steady climb back to healthy and sustainable rates of growth.
Narrative B
It's easy to focus on the superficially positive parts of the CPI report, but the reality is far more complex. The slight slowdown of the annual CPI from Mar. bolsters the view that the worst inflation has peaked, but inflation is concerningly moving from goods to services - an ominous indication that inflation is now broad-based.
