The Bureau of Labor Statistics released its 

Consumer Price Index Summary (CPI) on Thursday with mixed economic news. As expected, energy prices had spectacularly lower numbers. However, this did not carry over into other industries as many had hoped and predicted.

Energy items had a 12-month average of -19.6 percent, which lowered the average index for all items to a 12-month average of -0.1 percent. This news has slightly increased deflationary fears in world markets, especially among some policymakers in the eurozone.

While this is technically defined as deflation, other products are not following oil's lead -- many were expecting larger drops in food prices since the price of food is tied to transportation and production costs related to oil.

All items, other than food and energy, have continued a slow, steady upward trend, hovering at 1.6 percent annual inflation.

This is considered good news, as systemic deflation is considered an economic powder-keg. Deflation encourages consumers to hold off on purchases, hoping the value of their money increases, which creates rising inventories, reduced production, layoffs, and can turn into a period of hyper-inflation.

Still, this news goes against what many Americans predicted from cheap oil prices. Not only were Americans supposed to have more disposable income, but products were also supposed to be cheaper because of production costs associated with oil. It was supposed to be the jackpot for consumers. But it's not happening -- at least, not according to these CPI numbers.

Since the Carter administration, inflationary fears have been the "Boogeyman" of monetary theory: inflation is the systemic rise in prices in an economy.

Since G. William Miller's catastrophic mishandling of the 1970's crisis, the Federal Reserve has tightly controlled inflation with low interests rates and monetary policy.

Systemic deflation can be defined as the widespread lowering of prices throughout the economy. Intuitively, it's hard to believe that this could be a bad thing.

Historically, systemic deflation usually happens after prolonged recession or depression.

When deflation happens in one or two sectors, it generally benefits consumers, and either encourages consumption or signals the end of production (obsolescence of a product category is generally preceded by lower prices).

Technology-driven consumer products are a category that inherently has deflationary tendencies (a 26" color TV cost upwards of three-months salary at minimum wage in the 1960s, but now can be bought with mere hours at minimum wage). However, this is also offset by a portion of consumers willing to purchase the newest and best at the premium price.

When deflation hits the entire economy, though, the "animal spirits" in the collective consumers' psyche take over.

The inherent thought becomes, "Why buy today when I can buy tomorrow at a cheaper price?"

And then a cycle begins that has no good policy for correction: Inventories build up, firms cut production (layoffs, shutdowns, etc), firms lower prices to encourage consumption, people are enticed by tomorrow's lower prices, and the cycle repeats.

In monetary policy, the correct measure is usually to raise the interest rate. But that also has the psychological effect of lowering consumption on items tied to credit purchases.

Over-reaction by monetary policy and/or industry causes the worst possible scenario.

If production is cut too much (or too many businesses go under), then all of a sudden you have a lot of dollars chasing few products -- the breeding grounds of hyperinflation.

In the 2015 American economy, there is some speculation that systemic deflation is not going to happen, primarily because we are on the "upswing" of the Great Recession.

Probably the single greatest signal against this is the movement of commodities compared to the stock market's performance. Historically, most market analysts have believed in a low correlation (positive or negative) between stock price indexes and commodities.

This is why people generally buttress their portfolios with commodities to protect against slumps in the capital markets -- they typically do this to limit damage, as opposed to having holdings that work against each other.

However, since at least 2008, commodities have had a sharp inverse correlation with stock prices, with commodities in general on a significant downward trend.

This has the potential of creating a market that is "working against itself." An interesting academic paper about this phenomenon can be found here.

All eyes are now on the March 4 release of the Federal Reserve's Beige Book, which will give analysts greater insight into consumer spending habits.

In particular, this Beige Book will tell analysts what consumers are doing with the surplus disposable income created by lower energy prices.

Are consumers spending, saving, or paying down debt? Each has different economic consequences in this mixed market.

Worldwide oil inventories are extraordinarily high for winter months, signaling a prolonged suppression of worldwide oil prices. This, in turn, could continue to cause significant damage to the domestic oil industry, which is already facing massive layoffs.

In the short-term, we have good news. But what this will mean for the U.S. economy in the long-term is anyone's guess, as dozens of competing theories on the effects of the worldwide oil glut predict everything from economic prosperity to economic disaster.