Inflation Still Modest

Inflation is still modest and in line with expectations. Hourly earnings rose, but wage inflation probably has to go much higher to make its impact felt.  The U.S. has been importing disinflation from the rest of the world and the import prices reflect that. Inflation will be a non-factor in the 1st half of 2014. Inflation on the producers’ level is modest too despite the recent surge in Crude Materials PPI.