How and When Will This Inflation End?
Commentary
Can the press stop saying that inflation is “easing” please? It’s getting ridiculous. The Consumer Price Index came in at 7.1 percent from a year ago. That’s terrible. Yes, not as terrible as last month but look at the breakdown in detail. Food at home was up 10 percent and food at restaurants up 12 percent. Fuel oil is up 65.7 percent! Transportation services are up 14.2 percent.
So on it goes, and each month we get a report, the intensity shifts from one sector to another. The perception that this is cooling is based mostly on the weighting scheme that yields the final number. This is no world in which we are watching the problem gradually disappear. You can see the scale of the problem by looking at the so-called sticky rate of price increases over 14 years. This reveals which part of the overall index is truly embedded and less subject to exigencies of temporary market change….