Inflation is back

All indications are that inflation is back.

Minutes ago, the US Labor Department reported that the CPI rose 0.5 percent in March from February, or 0.4 percent excluding food and energy. This follows a Commerce Department report of a 1.8 percent increase in retail sales for March, the biggest rise in a year.

The US data is only the latest indicator of a return of inflation. In Germany, consumer prices were up 0.3% in March from February. In Asia, Thailand's consumer-price index rose to a 33-month high of 2.3 percent in March compared with a year earlier, while in the Philippines, consumer prices rose 3.8 percent in March from a year earlier, the highest rate since late 2001. China's money supply as measured by M2 was up 19.2 percent in March over a year earlier.

The Monetary Authority of Singapore announced a tightening of monetary policy on Monday in an attempt to head off inflation. The Federal Reserve may have to consider doing the same before long.