US consumer prices unchanged

The US economic data on Thursday were positive. From Bloomberg:

Consumer prices were unchanged in February, the first time they didn’t increase since March 2009, Labor Department figures showed today in Washington. The index of leading indicators rose 0.1 percent last month, the 11th straight gain, according to the Conference Board, a New York research group...

Excluding food and energy costs, the so-called core index increased 0.1 percent, in line with forecasts, capping a 1.3 percent year-over-year gain that was the smallest since 2004...

Another Labor Department report today signaled the job market is gradually improving along with the economy. First-time jobless applications dropped by 5,000 to 457,000 in the week ended March 13, in line with forecasts.

Manufacturing in the Philadelphia region expanded in March at the fastest pace so far this year as factories boosted payrolls, figures from the Fed Bank of Philadelphia also showed. The bank’s general economic index rose to 18.9, the highest level since December, from 17.6 in February. Readings greater than zero signal growth.

The Bloomberg article sounds optimistic about the inflation outlook.

The U.S. economy will keep expanding without a pickup in inflation that would require the Federal Reserve to raise interest rates, reports today indicated...

“We’re on the recovery path,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “There’s not much pressure on inflation. There’s really no need for the Fed to raise short-term interest rates any time soon.”

But such a conclusion is probably premature. Inflation is a lagging indicator. As the economy recovers and employment rises, inflation is likely to pick up.