How Bad Will Today's Inflation Report Be?

It is surely an ill omen that the spin meisters are already trying to sugarcoat the CPI report for June even before the report gets released.

Economists generally believe the headline year-over-year number will top the 8.6 percent figure reported for May, with the Federal Reserve Bank of Cleveland’s model predicting inflation hit nearly 8.7 percent last month, for example. The monthly rise is expected to be similar to June’s at 1 percent.

But core CPI, excluding food and energy, is expected to decline from 6 percent over the previous 12 months to something in the 5.7 percent ballpark. And since June, the monthly rise is expected to come in around 0.5 percent, down slightly from a month earlier.

In other words, if you don't count the things you worry about most—like eating—inflation is doing better.

That will no doubt make those higher grocery bills and higher prices at the gas pump so much better.

Look for reality to set in when the official stats come out later this morning.