According to the traditional rules of politics, the US Federal Reserve and President Joe Biden’s administration should get credit for America’s relatively painless escape from inflation, regardless of whether their past policies helped create it. But do they really deserve it?
CAMBRIDGE – On November 14, remarkably, the US Bureau of Labor Statistics announced that the consumer price index was unchanged in October. To be clear, that means the level of the CPI was unchanged; its rate of growth, or inflation, was actually zero. Of course, one month doesn’t mean much. Gasoline prices won’t plunge 5% every month, as they did between September and October. But there are also more promising – and meaningful – longer term data available: the headline CPI inflation rate over the last 12 months was 3.2%, far below the 6.5% average in 2022. At the risk of tempting fate, one might say that the inflation battle is being won.
CAMBRIDGE – On November 14, remarkably, the US Bureau of Labor Statistics announced that the consumer price index was unchanged in October. To be clear, that means the level of the CPI was unchanged; its rate of growth, or inflation, was actually zero. Of course, one month doesn’t mean much. Gasoline prices won’t plunge 5% every month, as they did between September and October. But there are also more promising – and meaningful – longer term data available: the headline CPI inflation rate over the last 12 months was 3.2%, far below the 6.5% average in 2022. At the risk of tempting fate, one might say that the inflation battle is being won.