Has Recent Inflation Been Higher or Lower?

Alan ReynoldsA front ‐​page headline screams “Inflation Is Back at Highest in Over a Decade.” That sounds as if inflation recently came back up to a record peak after a nice period of quiescence. Actually, inflation was twice as high from March to June as it has been since.The lower numbers of the past three months are still bad enough, yet the difference between higher and lower numbers seems worth mentioning. Change seems to mystify and elude TV and newspaper reporters because they discount recent news and keep extolling “The Mystifying Arithmetic of Year ‐​to‐​Year Inflation Estimates. ”Earlier this year, from March to June, inflation was rising twice as fast (0.73% a  month) as it has since. On a year‐​to‐​year basis, the June CPI in was 5.32% higher than in June 2020 when we just starting to pull out of pandemic lockdowns. This September, the latest year‐​to‐​year change was still 5.38% – slightly higher than it was in June. Inflation must h ave sped up, right? On the contrary, the graph shows that the recent monthly pace of inflation has been reduced by half with no effect at all on the misleading yet newsworthy year‐​to‐​year changes.In the past three months, the CPI rose by 0.39% a  month. A year earlier, from July to September of 2020, the average monthly increase was 0.37%. Since monthly increases were the same, how could the year‐​to‐​year increases remain stuck at around 5.3% for June, July, August, and ...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs