Don’t Be Fooled By CPI Thursday

We should know more about inflation at the consumer level on Thursday morning. That’s when CPI data comes out and investors will be sifting through the numbers with a fine tooth comb.

Economists polled by Reuters expect the overall CPI to rise 0.4 percent in July, compared with June's gain of 1.1 percent.

One of those people sifting through the numbers will be River Twice Research president Zachary Karabell. “These statistics come out and people use them incorrectly and assume they understand them when in fact they don’t," he says on Fast Money.

The headline number will include food and fuel "which we know has been going up" and as a result Karabell feels inflation is a given. But if the market panics you shouldn't.

“Ignore the headline CPI number and focus on individual items,” he says . “The key to the CPI will be prices for furniture, electronics and clothes.”

Core CPI, excluding volatile food and energy prices, is forecast to rise 0.2 percent in July vs. June's gain of 0.3 percent.

In fact, any kind of panic on inflation could be an opportunity according to Karabell. "If a hot inflation number drives the market lower try to exploit it," he concludes.

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