JPM economist Daniel Silver noted.....>

US DATA REACT: JPM economist Daniel Silver noted Fed Chair Yellen "recently

remarked that "it is common to see movements in inflation of a few tenths of a

percentage point that are hard to explain";" thus he examined "just how

surprising the recent inflation data have been using a "triangle model"

framework," which "relates core inflation to labor market slack, supply shocks,

and inflation expectations."

- He adds triangle model residuals let "us see the changes in inflation that

these factors do not explain, or inflation surprises. Based on these figures, we

observe: (i) the recent downside surprises in inflation are large, but not

unprecedented in magnitude, (ii) the surprisingly weak inflation so far this

year occurred after surprisingly strong inflation in much of 2016, and (iii)

downside surprises are a fairly recent phenomenon in this expansion, making it

unlikely that the recent weakness can be attributed to changes in the economy

that have been occurring over an extended period of time."