Quote:
Originally Posted by opendoor
The big caveat is that a lot of what's keeping overall inflation at a normal level the last 4 months has been declines in energy prices compared to earlier in the year, which isn't going to continue indefinitely. So if non-energy prices keep rising while energy levels off, then we have inflation again.
At the same time, energy affects basically everything, but its impact isn't necessarily felt immediately in terms of consumer prices. So a lot of the prices for goods now are based on energy, raw material, and transport prices from months ago. And all of those things have come down in price recently, so there's some reason to think that price pressures will soften a bit (barring another spike in energy prices).
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The other thing though is as we get into months which had 7-8% inflation instead of 3-4% inflation inflation naturally decreases because the starting point was higher. Sept 2020-2021 was 4%. Once you get to Feb when the energy prices peaked inflation from the previous year accounted for those spikes.
The Month to Month number is more more interesting until about February.