Tomorrow morning, we get the June inflation number.
As we discussed yesterday, rising gas prices in June will be a big contributor to upward pressure on CPI. The consensus view is for a hot headline number – a new 40-year high.
But as we also discussed yesterday, given some weakness in other inflation inputs, as well as weakness in broad economic data, don’t be surprised if the Fed and the media try to turn focus to the “core” inflation rate (in effort to manage confidence).
The core number excludes the effects of food and energy. It has been ticking down the past two months, and is expected to continue that trend in tomorrow’s report.
On cue, we had an article from Reuters this afternoon that drew attention to the core number. And the head economics guy at the White House tweeted this, this afternoon…