INFLATION = 4.3%….The headline inflation rate for 2007 is now official:

The Consumer Price Index rose 0.4 percent in January, a bigger gain than economists had predicted. Over the last 12 months, the index has surged by 4.3 percent, one of the highest year-over-year rates in decades, the Labor Department said.

….The core rate is 2.5 percent above its level in January 2007, above the Fed’s recognized comfort zone ceiling of 2 percent.

Italics mine. I don’t have any special point to make about this except to call attention to the numbers themselves. A lot of people — including a lot of reporters — are still vaguely under the impression that inflation is running at the same low rate it’s been running at for the past decade. It’s not. The CPI was up 4.3% last year, which means that any growth rate less than that is negative in real terms. That applies to interest rates, retail sales figures, government outlays, wage increases, etc. etc.

I’m just pointing this out as a public service. As always, “Economists predict that inflation will taper off by the second half of this year.” And maybe it will. But for now it is what it is.

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