Wall Street loved today's April inflation report from the Bureau of Labor Statistics because it supposedly showed benign inflation. "Inflation pressures ease despite food price jump," was the AP headline.

But the raw data were anything but reassuring. Gas prices rose 5.6 percent in April -- a 92 percent annual rate! -- but in the BLS calculation prices actually "dropped" for the month because of seasonal adjustment. Ie. -- prices always climb as summer approaches, so let's not count that. Do you feel as though gas prices dropped last month? Barry Ritholtz and Big Picture don't.

The BLS reported that prices rose modestly in April, below consensus expectations.

The usually Bullish Michael T. Darda of MKM Partners was rather skeptical of the data:

From the CPI report, “In April, the index for petroleum-based energy fell 1.6%, offsetting a 2.5% increase in the index for energy services. The transportation index declined 0.7% in April, reflecting a 2.0% decrease in the index for gasoline.” And to top it off, the index of commodity prices rose just 0.1%.

Huh? Gasoline prices rose by about 10% in April. Virtually every index of commodity prices is near all-time highs (and up about 30% since the beginning of the year). I’m not sure what the BLS is smoking here, but it must be pretty strong stuff.

I have to agree.