Goods versus services inflation
Note this chart from Credit Suisse. It shows the US trends in goods versus services inflation.
The prices of services are rising close to 3% year-over-year while commodities ex-food and energy prices are down 0.5%.
The big question for the Fed at the moment is whether CPI will return to higher levels and it's charts like this that give them confidence. It argues that the decline in commodities inflation and subsequent pass-throughs are what's weighing on prices.
For more, see today's CPI data.
