In the first half of 2022, January to June, CPI inflation averaged 0.89% a month (nearly 1%). In the second half, the monthly changes averaged 0.16% (less than two‐tenth of one percent).Just multiply the average monthly inflation rate times twelve to see that the annual rate of inflation slowed from 10.7% in the first half to 1.9% in the second.Reducing inflation by 8.8 percentage points for half a year seems worthy of more attention. Instead, top Fed officials and uncritical journalists keep speaking and writing as though the change was barely discernable, merely a slight easing. The reason for that nearly universal misunderstanding is the perennial confusion of year‐to‐year changes (a 12‐month average) with what has been happening recently.
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