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Gluskin's David Rosenberg: 'I Don't Think Inflation Is Dead'

By    |   Friday, 07 March 2014 06:20 PM

When it comes to inflation, David Rosenberg, chief economist at Gluskin Sheff + Associates, isn't running with the pack.

"Everybody has concluded that inflation is dead," he told Bloomberg TV. "I don’t think inflation is dead."

While the 0.4 percent February increase in average hourly earnings announced Friday is just "one data point," Rosenberg says, "a lot of wage pressure is coming out of selected industries."

He cites mining as an example.

Editor’s Note: 38 Trades That Could Turn $1,000 Into $49,000

If earnings continue to rise about 0.3 percent for the next two to three months, "I will feel good about my inflation call," Rosenberg said.

He thinks inflation will head back to the Federal Reserve's target of 2 percent. Consumer prices rose 1.6 percent in the year through January.

"This is a Fed that wants moderately higher inflation," Rosenberg said. But he doesn't think that will prevent the central bank from raising short-term interest rates by the middle of next year as economic growth accelerates.

Meanwhile, Rosenberg says that both Obamacare and the Dodd-Frank financial reform law have impeded job creation.

Getting back to inflation, Jon Hilsenrath of The Wall Street Journal writes that the latest price data point to a split between goods and services inflation.

"The U.S. seems to be in a new part of the inflation cycle," he writes. "Services inflation is stabilizing at a lower level than it was in the 1990s and 2000s. It is long past falling. Goods inflation, on the other hand, is in a new down cycle."

Editor’s Note: 38 Trades That Could Turn $1,000 Into $49,000

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When it comes to inflation, David Rosenberg, chief economist at Gluskin Sheff + Associates, isn't running with the pack.
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2014-20-07
Friday, 07 March 2014 06:20 PM
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