Guts of U.S. CPI Data Show Key Inflation Gauge Weakest in Years

Weakness in the guts of Tuesday’s U.S. inflation report suggests the real inflation scare, at least for central bankers, may be the prospect of softening price pressures, rather than the fears of an acceleration that gripped Wall Street last month.

So-called “procyclical inflation,” which denotes changes in the prices of goods and services that in the past have tended to be more sensitive to labor-market conditions, moderated in February to the lowest level since December 2015, according to data from the Labor Department report compiled by Bloomberg. (Federal Reserve Bank of San Francisco economists popularized the term in recent research.)