Kudlow’s Money Politics

Inflation? What Inflation?

Reality check for economic pessimists and worrywarts out there: inflation is coming down as the Fed has curbed money supply creation.

And of course, lower oil prices is helping enormously. Since its peak in July, oil has come down 34 percent.

Here are some Goldilocks factoids:

So-called core inflation (ex. food and energy) has dropped from 3.8 percent annually last May, to 1.4 percent in December measured over three month periods.

The 4th quarter core rate was only 1.8 percent.

And for the overall CPI, the 4th quarter rate declined by 2.2 percent annually’”the biggest quarterly drop since 1949.

When you couple these positive inflation results with a pickup in industrial production and unexpected strength in retail sales, the Goldilocks economy really outperformed pessimistic expectations at the end of 2006.

Why Democrats attack the economy is beyond me. Non-inflationary growth is pluperfect.

If it ain’t broke, don’t fix it.

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