No, that is not a typo. It does spell D-E-F-L-A-T-I-O-N. Albert Edwards of SocGen with the note:
Global Strategy Weekly213 May 2021Two truly shocking pieces of US economic data have been published in the past week that my new bandaged nose certainly failed to sniff out. Last Friday saw April’snon-farm payrolls confound expectations of a rise of around 1 million, to record a miserable rise of 266,000–one of the biggest misses on record. And on Wednesday this week, the shock within the April CPI release was that core CPI rose a stunning 0.9% mom (and 3.0% yoy) against expectations of a 0.2% rise (2.3% yoy). Google searches for the word “Stagflation” will be soaring.
Core CPI gains were largely concentrated in sectors that are reopening or facing supply shocks:eg airline fares were up 10.2%, hotel prices up 7.6%, car rental prices up 16.2% and used auto prices up 10%. Transitory? Probably, but the tone will be set for the next few months especially as this ‘hard’ data confirms what the ‘soft’ survey data has been warning of(eg see chart below):
