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SBE Council Economist on Latest Inflation Numbers

Raymond J. Keating, chief economist for the Small Business & Entrepreneurship Council (SBE Council), offered the following statement in reaction to the CPI inflation numbers just released by the U.S. Bureau of Labor Statistics:

“According to the Bureau of Labor Statistics, CPI inflation over the past year registered only 1.5%. However, it’s very much worth noting that during 2010, there was a substantive difference between the first half and second half of the year.

“During the first six months, inflation was non-existent, with annualized CPI inflation actually down by 0.2%. But the story shifted notably in the second half of the year, with the annualized inflation rate over the past six months coming in at 3%.

“Tie this trend in with other key factors, namely, historically expansive monetary policy, and worrisome price signals via oil and gold prices, and small business owners, investors and consumers should keep a wary eye on inflation looking ahead.

“And remember that among the various problems generated by inflation are pushing up interest rates, raising real capital gains taxes, and creating uncertainty over what the future value of the dollar – all of which works against investment, entrepreneurship and economic growth.”

SBE Council is a national, nonpartisan advocacy organization dedicated to protecting small business and promoting entrepreneurship. For more information, please visit: www.sbecouncil.org.

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