EXPLAINER: Why US inflation is so high, and when it may ease
3 years, 3 months ago

EXPLAINER: Why US inflation is so high, and when it may ease

Associated Press  

WASHINGTON — Inflation is starting to look like that unexpected — and unwanted — houseguest who just won’t leave. Economists at Wells Fargo have joked grimly that the Labor Department’s CPI — the Consumer Price Index — should stand for “Consumer Pain Index.’’ Unfortunately for consumers, especially lower-wage households, it’s all coinciding with their higher spending needs right before the holiday season. “A sizeable chunk of the inflation we’re seeing is the inevitable result of coming out of the pandemic,’’ said Jason Furman, an economic adviser in the Obama White House now at the Harvard Kennedy School. “The demand side of the U.S. economy will continue to be something to behold,’’ says Rick Rieder, chief investment officer for global fixed income at Blackrock, “and companies will continue to have the luxury of passing through prices.” Megan Greene, chief economist at the Kroll Institute, suggested that inflation and the overall economy will eventually return to something closer to normal. “But economists have to be very honest about defining transitory, and I think this could last another year easily.’’ “We need a lot of humility talking about how long this lasts,” Furman said.

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