We at Sigma believe that understanding inflation is an important element in effectively managing our client portfolios. In the that regard, we note that according to the latest Bureau of Labor Statistics report, consumer prices in January increased 2.9% over the past 12 months.
At approximately the same time, J. M. Smucker Co. announced that average prices on items jumped 16% from the prior year, while Jif peanut butter prices surged 30%. Also note that grain prices continue at high levels.
Apparently there is a material difference between the government’s version of inflation and the PB&J index.
Just because we believe that assessing the outlook for inflation is important, does not mean it is easy.
Walter J. Kirchberger, CFA