The inflation rate could jump, but there’s a simple reason not to read too much into it.

0
9

When the government releases its latest consumer price inflation reading at 8:30 a.m. on Tuesday, Wall Street investors will be eagerly watching the data point, which is expected to jump starting this month.

Inflation data matters because it gives an up-to-date snapshot of how much it costs Americans to buy the goods and services they regularly consume. And because the Federal Reserve is charged in part with keeping increases in prices contained, the data can influence its decisions — and those affect financial markets.

But there’s a big reason not to read too much into the expected bounce in March and April — and it lies in so-called base effects.

Inflation Is Set to Jump #g-base-effects-box , #g-base-effects-box .g-artboard { margin:0 auto; } #g-base-effects-box p { margin:0; } #g-base-effects-box .g-aiAbs { position:absolute; } #g-base-effects-box .g-aiImg { position:absolute; top:0; display:block; width:100% !important; } #g-base-effects-box .g-aiSymbol { position: absolute; box-sizing: border-box; } #g-base-effects-box .g-aiPointText p { white-space: nowrap; } #g-base-effects-335 { position:relative; overflow:hidden; } #g-base-effects-335 p { font-family:nyt-franklin,arial,helvetica,sans-serif; font-weight:300; line-height:18px; height:auto; filter:alpha(opacity=100); -ms-filter:progid:DXImageTransform.Microsoft.Alpha(Opacity=100); opacity:1; letter-spacing:0em; font-size:15px; text-align:left; color:rgb(0,0,0); top:1.2px; position:static; text-transform:none; padding-bottom:0; padding-top:0; mix-blend-mode:normal; font-style:normal; } #g-base-effects-335 .g-pstyle0 { height:18px; position:relative; } #g-base-effects-335 .g-pstyle1 { line-height:16px; height:16px; font-size:13px; color:rgb(153,153,153); top:1px; position:relative; } #g-base-effects-335 .g-pstyle2 { line-height:16px; height:16px; font-size:13px; text-align:right; top:1px; position:relative; } #g-base-effects-335 .g-pstyle3 { font-weight:700; line-height:16px; height:16px; font-size:13px; text-align:right; top:1px; position:relative; } #g-base-effects-335 .g-pstyle4 { font-weight:700; line-height:14px; height:14px; font-size:12px; text-transform:uppercase; top:1px; position:relative; } #g-base-effects-335 .g-pstyle5 { line-height:13px; height:13px; font-size:11px; text-transform:uppercase; color:rgb(153,153,153); top:0.9px; position:relative; } #g-base-effects-335 .g-pstyle6 { line-height:16px; height:16px; font-size:13px; top:1px; position:relative; } #g-base-effects-600 { position:relative; overflow:hidden; } #g-base-effects-600 p { font-family:nyt-franklin,arial,helvetica,sans-serif; font-weight:300; line-height:19px; height:auto; filter:alpha(opacity=100); -ms-filter:progid:DXImageTransform.Microsoft.Alpha(Opacity=100); opacity:1; letter-spacing:0em; font-size:16px; text-align:left; color:rgb(0,0,0); top:1.3px; position:static; text-transform:none; padding-bottom:0; padding-top:0; mix-blend-mode:normal; font-style:normal; } #g-base-effects-600 .g-pstyle0 { height:19px; position:relative; } #g-base-effects-600 .g-pstyle1 { line-height:16px; height:16px; font-size:13px; top:1px; position:relative; } #g-base-effects-600 .g-pstyle2 { font-weight:700; line-height:16px; height:16px; font-size:13px; top:1px; position:relative; } #g-base-effects-600 .g-pstyle3 { line-height:13px; height:13px; font-size:11px; text-transform:uppercase; color:rgb(153,153,153); top:0.9px; position:relative; } #g-base-effects-600 .g-pstyle4 { line-height:16px; height:16px; font-size:13px; color:rgb(153,153,153); top:1px; position:relative; } #g-base-effects-600 .g-pstyle5 { font-weight:700; line-height:14px; height:14px; font-size:12px; text-transform:uppercase; top:1px;