The Consumer Price Index picked up by 8.6 percent, as price increases climbed at the fastest pace in more than 40 years (New York Times).
If you don’t think about it too hard, it sounds like prices rose 8.6% in May. But that’s not true.
The Department of Labor’s Consumer Price Index actually rose 1.0% in May. The 8.6% increase refers to the fact that the index was 8.6% higher than a year ago.
Would it be too hard for news people to write headlines that clearly conveyed what happened? No, but it wouldn’t sound as “newsworthy” (i.e. interesting) to say prices rose 1.0% in May or that they rose 8.6% in the past year.
What makes this especially annoying is that this is how the government announced the latest inflation news:
The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.0 percent in May on a seasonally adjusted basis after rising 0.3 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 8.6 percent before seasonal adjustment.
The increase was broad-based, with the indexes for shelter, gasoline, and food being the largest contributors. After declining in April, the energy index rose 3.9 percent over the month with the gasoline index rising 4.1 percent and the other major component indexes also increasing. The food index rose 1.2 percent in May as the food at home index increased 1.4 percent.
The index for all items less food and energy rose 0.6 percent in May, the same increase as in April. While almost all major components increased over the month, the largest contributors were the indexes for shelter, airline fares, used cars and trucks, and new vehicles.
It’s so much easier to simply say, as the Wall Street Journal did:
Inflation Reaches 8.6% in May
Back to the New York Times for an explanation, not a headline:
In the short term, high inflation can be the result of a hot economy — one in which people have a lot of surplus cash or are accessing a lot of credit and want to spend. If consumers are buying goods and services eagerly enough, businesses may raise prices because they lack adequate supply. Or companies may choose to charge more because they realize they can raise prices and improve their profits without losing customers.
But inflation can — and often does — rise and fall based on developments that have little to do with economic conditions. Limited oil production can make gas expensive. Supply chain problems can keep goods in short supply, pushing up prices.
The inflationary burst America has experienced this year has been driven partly by quirks and partly by demand.
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