Right on the heels of several Fed officials expressing their conviction that the inflation trend is under control, comes the unhappy news from the BLS' March CPI report. From the Wall Street Journal.com:

Consumer prices jumped 0.6% in March from February, the Labor Department said Wednesday, mostly because of higher energy costs. But even excluding the volatile food and energy categories, "core" prices rose a relatively sharp 0.4%, after a 0.3% increase in February. The two-month increase in core prices is the largest in four years, according to Nomura Securities.

The year-over-year change in consumer prices rose to 3.1% from 3% in February. The core inflation rate actually edged down to 2.3% from 2.4%. But in the last six months, core inflation has been 2.7%, annualized...

Of course nobody was really suggesting that the March number was going to look good, but , in contrast to yesterday's PPI report, the jump in the core measure was a very unwelcome.  However, the same jump did not occur in the median CPI, an alternative measure of core inflation we monitor at the Cleveland Fed.  Here's the summary information:

                                                                                                                                              

Percent Change From Previous             Month
Oct. Nov. Dec. Jan. Feb. Mar.
CPI 0.6 0.3 0.0 0.1 0.4 0.6
CPI less food & energy 0.2 0.2 0.2 0.2 0.3 0.4
MEDIAN CPI 0.2 0.1 0.2 0.3 0.2 0.2
Percent Change, Last 12             Months
Oct. Nov. Dec. Jan. Feb. Mar.
CPI 3.2 3.5 3.3 3.0 3.0 3.1
CPI less food & energy 2.0 2.2 2.2 2.3 2.4 2.3
MEDIAN CPI* 2.3 2.2 2.3 2.4 2.4 2.4

            

My colleague Mike Bryan -- the brains, along with Steve Cecchetti, behind the median measure -- tells me that the dispersion in individual prices (excepting food and energy) was unusually large in the March data.  The largest he's seen in about 5-1/2 years, in fact. 

That sort of volatility ought to give us some pause in interpreting this particular report.  With the rock-steady median CPI statistic,  I'm going to suggest that maybe it's premature to be jumping to  conclusions about whether or not the trend is getting away from us.

Elsewhere in blog-o-land: Kash at Angry Bear has a nice discussion of why we focus on core measures.

UPDATE: The Big Picture is not so optimistic.