The US Federal Reserve's well worn mantra that the current rate of below target inflation is "transitory" must be getting more difficult to justify.
Analysts are beginning to ask of the Fed: "At what point does transitory become a trend?"
Fed economists remain hopeful that robust jobs growth seen, not only in monthly labour reports but also in forward-looking surveys, will translate into higher wage growth and consumer spending and thus inflation.
Then the current hawkish rhetoric of Fed officials and the central bank's path of gradual interest rate increases can be truly justified.
Consumer prices in June
But US consumer price inflation dipped in June, putting the Fed's dilemma deep under the spotlight.
The data show the headline consumer price index (CPI) rose by an annual 1.6% in June, slowing from 1.9% in May and delivering a worse outcome than the 1.7% reading expected by analysts.
The core CPI, which strips out food and energy prices, held at 1.7% from the previous month, as forecast.
Compare with PCE
CPI is not the Fed's favoured measure of inflation, however, so it is difficult to gauge how much importance the central bank attaches to this data release.
Although CPI is used in important government business such as social security payments and is the reference rate for certain financial products, the Fed prefers personal consumption expenditure (PCE) over CPI.
Although the two measures follow similar trends, PCE has generally returned a lower inflation reading than CPI. Indeed, the annual core PCE rate of inflation in May stood at 1.4%.
So, given the tight labour market, it's hard to see what's stopping inflation from rising back above the Fed's target rate of 2%? Why is lower inflation starting to look more like a trend than a transitory concern?
Michael Hartnett at Bank of America Merrill Lynch calls it Wall Street "Japanification" and identifies three secular trends.
"First, excess debt encourages saving, not spending; second, ageing demographics also encourage saving; and third, the daily disruption of technological automation is killing wage expectations," he says.
The markets react
The markets are taking note, and following the release of Friday's CPI data, the dollar fell 0.5% against the euro, lost 0.7% versus the yen and 1% against the pound.
A country's currency should be supported by rising interest rates as higher yields drive domestic and foreign investment.
The dollar index, a measure of the greenback's relative strength against a basket of its main rivals, fell 0.5% to 95.29.
It is down 7.9% since the beginning of the year despite two quarter-point rate hikes this year and an almost unanimously hawkish Fed.
It would appear markets are coming around to the low-inflation-as-a-trend way of thinking.
Retail sales and consumer sentiment
Consumer activity does, indeed, appear to be slowing. Retail sales data for June made disappointing reading for rate hawks.
Core sales, which exclude vehicles, fell 0.2% after falling 0.3% in May.
Consumers are losing confidence too, according to Friday's data. The University of Michigan's measure of consumer sentiment eased to 93.1 in July, from 95.1 in the previous month.
One bright spot was industrial production, which climbed by 0.4% in June after rising by just 0.1% in May.
But taken together, Friday's data defined a scene of slowing consumer activity in the world's biggest consumer society.