The short-term inflation outlook isn’t as grim as it looks, but the long-term situation could be awful
by Eric Boehm
As America exits the COVID-19 pandemic, demand for goods and services is surging—and triggering worries about inflation.
The consumer price index for March showed a 2.6 percent increase over the same month last year. That’s the largest year-to-year increase in prices since the summer of 2018, and significantly more than the 1.4 percent year-to-year increase that was being reported just two months ago. Meanwhile, the White House Council of Economic Advisors warned this week that “measured inflation” is likely to increase over the next few months. And the price of gasoline—perhaps the most obvious signal of rising prices, at least for those of us who don’t hold advanced degrees in economics—has been steadily marching upwards since the start of the year.
Should we be worrying about a return to the rampant inflation of the 1970s?