From an academic standpoint, yes inflation is moderating.  From a consumer standpoint, no.  Mr. Krugman should add in a column on his graph for the "egg index".  Food prices are what people feel the most and respond to the strongest.  With eggs at Aldi going for $4.70, that is one kick in the inflation pants!  Never mind Avian flu.  It doesn't matter what caused the spike.  All that people notice is the price, not the reason.The public will never let go of inflation fears until food prices go down.  We are now experiencing massive flooding in California, which will greatly reduce agricultural production this year and add more upward pressure on food prices.  The cost of metals has gone way up.  Experience has shown me that when the cost of industrial products go up, suppliers don't reduce prices when raw material prices come back down.  The price increases get built into the system.  Inflation increases profit margins.  Because of these burst in inflation, everything will end up costing more indefinitely.  People feel that.

From an academic standpoint, yes inflation is moderating.  From a consumer standpoint, no.  Mr. Krugman should add in a column on his graph for the "egg index".  Food prices are what people feel the most and respond to the strongest.  With eggs at Aldi going for $4.70, that is one kick in the inflation pants!  Never mind Avian flu.  It doesn't matter what caused the spike.  All that people notice is the price, not the reason.The public will never let go of inflation fears until food prices go down.  We are now experiencing massive flooding in California, which will greatly reduce agricultural production this year and add more upward pressure on food prices.  The cost of metals has gone way up.  Experience has shown me that when the cost of industrial products go up, suppliers don't reduce prices when raw material prices come back down.  The price increases get built into the system.  Inflation increases profit margins.  Because of these burst in inflation, everything will end up costing more indefinitely.  People feel that.

user
no
assistant