Inflation Continues to Rise

The government reported that inflation rose again last month. Consumer prices edged up 0.4% in May which was the largest increase in more than a year. The “core rate,” which excludes food and energy, rose by 0.3% which was the largest increase since 2009.

I want to be careful not to overstate the case. No, there’s no danger of hyperinflation. Rather, the trend of disinflation, lower price increases, seems to have come to an end. In the last year, headline inflation is up 2.1% and core inflation is up 2.0%. Overall, I think this is a good thing as inflation moves closer to the Fed’s target zone.

Posted by Eddy Elfenbein on June 17th, 2014 at 11:32 am

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