Published December 10, 2021
Friday’s inflation numbers — a 6.8 percent increase compared with just a year ago, the highest level in 39 years — are scary enough. Scratch just a bit below the surface, and you’ll see the worst has yet to come.
The full report from the Bureau of Labor Statistics provides the details. Inflation is only 6.8 percent because the data includes months before the coronavirus vaccines became widely available. The consumer price index rose by an average 0.3 percent between last December and February. Those months will soon be dropped from the annual headline rate and replaced by data from the next three months. Monthly inflation has averaged 0.64 percent in the nine months since then. Simply replacing the old data with this average should push annual inflation above 7.5 percent by March.
The most recent monthly increases are even more troubling. Inflation for the past two months has averaged 0.85 percent. If these hikes continue over the next three months, the headline inflation rate would approach 9 percent by spring. If they persist for a year, it would surpass 10 percent — the first time the United States would have double-digit inflation since the early 1980s.
Henry Olsen is a Washington Post columnist and a senior fellow at the Ethics and Public Policy Center.