The consumer price index for July rose by 2.9% on a Y/Y basis, and thereby put to rest the absurd “low-flation” thesis that central bankers and Wall Street stock peddlers alike gummed about endlessly a year or two back. Even when you drop the food and energy items out of the index—-items real people may or may not actually need—-the core CPI came in at reasonably hot 2.4% rate.
To be sure, the Fed’s vaunted 2.00% inflation target amounted to economic hogwash from the moment it became official policy in January 2012. There is no evidence whatsoever that you get more growth with 2.00% inflation than you do with 1.00% or 3.00% or any other number.
To the contrary, there is actually every reason to believe that in a context in which high cost America has priced itself out of the world market that no inflation at all or even deflation would be far more conducive to sustainable prosperity.