Janet Yellen Made One Of The Great Calls Of The Summer

Janet Yellen will speak on Friday at the Jackson Hole economic symposium, where she's likely to give a thorough assessment of the state of the labor market, as she sees it.

The overwhelming consensus is that she'll acknowledge some improvement in the labor market, but she'll identify enough "slack" in the system, so as to warrant continued easy policy from the Fed.

In the meantime, it's worth giving Yellen credit for a call she made at the beginning of the summer.

Back at her press conference in June, she was asked about about some CPI reading indicating rising inflation. She responded:

"I think recent readings on CPI index have been a bit on the high side but I think it's the data we're seeing is noisy. Broadly speaking inflation is evolving in line with the committee's expectations."

Traders, pundits, and economists really picked up on the use of the word "noisy" to dismissive the inflation data.

Well, Yellen appears to be right that whatever trend that was building was more noise than signal.

Here's a look at this year's monthly CPI readings:

Since Yellen made her comments, inflation readings have slid to their lowest level of the year.

Other readings corroborate the CPI.

Just as a quick example, here's the "Prices Received" index from this mornings Philly Fed Manufacturing Index. This measure also shows a sharp fading from the pressures early this summer.

It's unclear how much, if it all, Yellen will talk about topics beyond the labor market at Friday's speech. It's most likely that she'll really dive back into these issues at her September press conference. And at that conference it would appear Yellen will have been vindicated in her noise comments.