Is Inflation Back for Good?

Prices are up all over the economy. Here are scenarios about what might happen next.

by Brian Doherty
Reason.com

This month brought the most worrying inflation news in decades.

On June 10, the Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) “increased 0.6 percent in May on a seasonally adjusted basis after rising 0.8 percent in April,” bringing the year-over-year price increase on all items to 5.0 percent.

“This was the largest 12-month increase since a 5.4-percent increase for the period ending August 2008,” the BLS noted. And when you take out food and energy, the resulting yearly rise of 3.8 percent was “the largest 12-month increase since the period ending June 1992.”

CPI, whose components are constantly being adjusted, may well undercount inflation as most Americans experience it.

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