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Average Inflation over the Pandemic Avoids 'Base-Effect' Distortions
Since the start of the COVID-19 pandemic early last year, the nation has seen enormous swings in consumer prices, with extraordinary declines last spring giving way to similarly eye-popping increases as the economy has reopened. These large swings have whipsawed our standard 12-month measures of inflation and made it difficult to disentangle recent trends from the impact of prior declines. In this post, we discuss a measure that provides useful context to recent movements in inflation. Consumer Price Index (CPI) data for April, released May 12, showed robust increases in both the all-items index (“headline” CPI) ... (full story)