Just when you felt it was time to (as Jeff Macke says) "turn that frown upside down," that pesky misery index is on the rise again. Only this time, it's different.
While this barometer of unemployment + inflation posted its near-term peak in December 2009 and had been falling for the past year, 2011 has seen a sharp reversal. In fact, with April CPI (Consumer Price Index) data forecast to rise to 3.0% from 2.7% in March, the misery index is set to post its 4th consecutive monthly increase. What's troubling with this is that misery is creeping back despite the slow but steady slide in unemployment, meaning that, this time, it's all about inflation.
Of course, inflation and all its derivatives will be high on the agenda as Ben Bernanke & Co huddle up at the Fed this week. While no rate change is expected, the interest in clues as to what the bearded one is thinking is surging on hopes the chairman's inaugural post-FOMC meeting press conference will be more enlightening than the usual word-by-word analysis of the statement. (Hint: It won't.. and will likely only further the debate and confusion.)
The silver lining I see in all of this is that maybe —- just maybe -- an army of unemployed Greenspanologists may find new work mincing the words of the current Fed boss. A short-term reversal in an oversold dollar could be the trend to emerge from the Central Bank's spring break.
All the while, earnings season will kick into high gear with more than 100 S&P 500 members set to report in what's scheduled to be the second-busiest week of results reportage. And as my Kojakian co-host points out, that alone holds a treasure chest of clues on the mindset of consumers as well as the cost effects and pricing power of corporate America.
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