Inflation is worse than it looks

Source: EconLog
by Scott Sumner

“The government recently announced that the 12-month rise in the CPI slowed from 8.5% in March to 8.3% in April. But this is not good news, as inflation is actually getting worse. People have become used to thinking of inflation in a ‘let bygones be bygones’ fashion. Don’t cry over spilled milk; let’s focus on the inflation rate going forward. That might be appropriate under the Fed’s old inflation targeting regime, but is not appropriate under average inflation targeting.” (05/12/22)