No Sign of an Inflation Problem

Via the Dallas Fed, once the volatile prices have been stripped out there's no evidence of inflation. If anything, inflation has been falling in recent months (before objecting that these measures do not capture actual changes in the cost of living for households, please see here):

Trimmed Mean PCE Inflation Rate, FRB Dallas: February 2012 The trimmed mean PCE inflation rate is an alternative measure of core inflation in the price index for personal consumption expenditures (PCE). It is calculated by staff at the Dallas Fed, using data from the Bureau of Economic Analysis (BEA). ...

The trimmed mean PCE inflation rate for February was an annualized 1.4 percent. According to the BEA, the overall PCE inflation rate for February was 3.8 percent, annualized, while the inflation rate for PCE excluding food and energy was 1.6 percent.

The tables below present data on the trimmed mean PCE inflation rate and, for comparison, the overall PCE inflation and the inflation rate for PCE excluding food and energy. The tables give annualized one-month, six-month and 12-month inflation rates.

One-month PCE inflation, annual rate

Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 PCE 2.0 0.1 1.1 0.8 2.7 3.8 PCE excluding food & energy 0.0 1.4 1.7 1.8 2.7 1.6 Trimmed mean PCE 1.4 1.7 2.2 1.8 1.8 1.4

 

Six-month PCE inflation, annual rate

Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 PCE 2.4 1.7 1.6 2.0 1.7 1.7 PCE excluding food & energy 2.0 1.8 1.6 1.6 1.6 1.5 Trimmed mean PCE 2.0 1.8 1.9 1.9 1.8 1.7

 

12-month PCE inflation

Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 PCE 2.9 2.7 2.7 2.5 2.4 2.3 PCE excluding food & energy 1.6 1.7 1.8 1.9 1.9 1.9 Trimmed mean PCE 1.7 1.8 1.9 1.9 1.9 1.9

NOTE: These data are subject to revision ...

James Bullard is trying to make the case that domestic inflation depends upon the global output gap, and that gap looks inflationary, but I just don't see evidence for an emerging inflation problem in the tables. For the last four months or so, inflation has been stable or falling depending on the measure you choose, and that's not what you'd expect if there was increasing price pressure due to either global or domestic forces.