'Slightly better than anticipated': Experts respond to consumer price news — 'surprise is slowdown in core inflation'
The monthly Consumer Price Index report from the Bureau of Labor Statistics was released Tuesday morning, and while inflation continues to rise some economists appear pleased, with one stating the report is “slightly better than anticipated.”
Overall, the annual rate of inflation is 8.5 percent, but removing food and energy, prices are up 6.5 percent annually.
Headline CPI rose +1.2% in March, for a year-ended rate of 8.5%.\n\nCore inflation slightly lower than anticipated, rising by only 0.3%, yielding a year-ended rate of 6.5%.\n\nObviously inflation is higher than we hope. But this report is slightly better than anticipated.— Justin Wolfers (@Justin Wolfers) 1649766726
Gas prices are a big part of the inflation rate. CNN’s cable reporting calls the current report a “rearview mirror” look, given that gas prices are coming down. They add some economists are hoping the peak of the inflation has been reached. They also note that the U.S. does not rely much on oil from Russia, so in other countries, inflation is worse.
"Core" (ex- food and energy) prices were up 0.3% in March, a bit slower than the 0.5% growth in February. That deceleration should please the Fed.— Ben Casselman (@Ben Casselman) 1649766712
“Food prices are up 8.8% over the past year. Energy prices are up 32%, including 11% in March alone — reflecting the spike in energy prices associated with Russia’s invasion of Ukraine,” The New York Times’ Ben Casselman notes.
Casselman points to Putin’s illegal war in Ukraine for food price increases:
We've also seen a big jump in food prices, which is again partly the result of the war in Ukraine. Russia and Ukraine are both major global food producers.pic.twitter.com/7FiM4elycO— Ben Casselman (@Ben Casselman) 1649767459
And he sees some good news: “Headline inflation accelerated in March, but we all knew that would happen given gas prices. The bigger surprise is the slowdown in ‘core’ inflation.”
There’s still plenty to be concerned about. Casselman says this is “the fastest year-over-year inflation since 1981.”
Meanwhile, oil companies – not the President – set the price of gas at the pump and other energy products, and are under no obligation to price gouge, which is illegal in most states during a declared state of emergency, such as war, natural disasters, or COVID-19.
University of Michigan economist and public policy professor Justin Wolfers:
One key problem right now is that the most salient prices are rising at rapid rates. Prices for food at home (the grocery store, basically) rose 10% over the year. Gas rose 48%.\n\nWhile these prices are salient, they collectively only account for 12% of spending.— Justin Wolfers (@Justin Wolfers) 1649766910
And Wolfers throws a challenge to the mainstream media, which is generally focused on only bad news:
Lotta headlines today about "inflation at 40-year high." We have a nice test of whether the media is symmetrically interested in good news because in the next month or so, it's likely that unemployment will hit a 50-year low. Will this attract as many breathless headlines?— Justin Wolfers (@Justin Wolfers) 1649768280