Looking for the wrong inflation in the right places.

I'm David Brancaccio. The Federal Reserve's preferred measure of inflation is out this morning.

The Personal Consumption Expenditures Price Index ticked down in January, rising at a slower rate

of 2.4% in a year.

On Thursdays here we check in with Diane Swank, Chief Economist at the audit tax and

advisory firm KPMG, Diane Lower, but still up.

Yeah, they're still growing up and they're going up in the wrong places for the Fed.

I mean, the good news is that we saw goods prices continue to receive but what the Federal Reserve is worried about is that service sector inflation is getting sticky and that actually accelerated during the month.

Now some of the acceleration was actually due to higher interest

rates in financial service cost fees but another part of the acceleration is

something that they're going to be watching very closely and that's in everything

from food and accommodation services to health care costs.

Those are going up as well and that's an area where inflation could get more sticky and create a floor under inflation and they want to ensure

that inflation not only gets to 2%, it stays there.

That Diane, one last thing before we go.

It is the extra day of February and some people have noticed some

connection between markets being a little soft on leap days in history. Are you

sitting there worried about leap day?

No, causation and correlation are two different things and one of the things that I don't

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