Is Inflation Back for Good? – By Brian Doherty (Reason) / June 22 2021
Prices are up all over the economy. Here are scenarios about what might happen next.
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. As William Levin noted in National Review, medical costs account for just 8.9 percent of the CPI basket, even though they amount to 17.7 percent of GDP. And a massive one-quarter of the index is calculated not by assessing actual rental prices, but by asking homeowners the comparatively unscientific question, “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?”
CONTINUE > https://reason.com/2021/06/22/is-inflation-back-for-good/
