CPI prices increased 2.7 percent in the 12 months ending in Dec 2025. The Annual Equivalent rate in Dec 2025 was 3.7 percent in the episode of shifting energy sources; and the monthly inflation rate of 0.3 percent annualizes at 3.7 percent. Energy Services Prices increased 7.7 Percent in 12 Months ending in Dec 2025, Increased at Annual Equivalent 12.7 Percent in Nov 2025-Dec 2025 and increased 1.0 Percent in Dec 2025 or 12.7 percent Annual Equivalent. Consumer at Home Food Prices increased 2.4 Percent in 12 Months Ending in Dec 2025 and increased at Annual Equivalent 8.7 Percent in Dec 2025 and increased 0.7 Percent in Dec 2025 that annualizes at 8.7 Percent., Stagflation, Financial Repression, Recession Risk, Worldwide Fiscal, Monetary and External Imbalances, World Cyclical Slow Growth, and Government Intervention in Globalization
I United States Inflation
II Long-term United States
Inflation
III Current United States
Inflation
IV Global Inflation
V World Economic Slowdown
VA United States
VB Japan
VC China
VD Euro Area
VE Germany
VF France
VG Italy
VH United Kingdom
VI Valuation of Risk Financial
Assets
VII Economic Indicators
VIII Interest Rates
IX Conclusion
References
Appendixes
Appendix I The Great
Inflation
IIIB Appendix on Safe Haven
Currencies
IIIC Appendix on Fiscal
Compact
IIID Appendix on European
Central Bank Large Scale Lender of Last Resort
IIIG Appendix on Deficit
Financing of Growth and the Debt Crisis
IV Global Inflation
V World Economic Slowdown
VA United States
VB Japan
VC China
VD Euro Area
VE Germany
VF France
VG Italy
VH United Kingdom
VI Valuation of Risk Financial
Assets
VII Economic Indicators
VIII Interest Rates
IX Conclusion
References
Appendixes
Appendix I The Great
Inflation
IIIB Appendix on Safe Haven
Currencies
IIIC Appendix on Fiscal
Compact
IIID Appendix on European
Central Bank Large Scale Lender of Last Resort
IIIG Appendix on Deficit
Financing of Growth and the Debt Crisis
Note: This Blog will
post only one indicator of the US economy while we concentrate efforts in
completing a book-length manuscript in the critically important subject of
INFLATION.
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013,
2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2023, 2024, 2025, 2026.
Preamble. United States total public debt outstanding is $38.5
trillion and debt held by the public $30.8 trillion (https://fiscaldata.treasury.gov/datasets/debt-to-the-penny/debt-to-the-penny) [Date last updated Jan 21, 2026.] The Federal Reserve
Bank of Saint Louis estimates Federal Total Public Debt as percent of GDP at
118.8 in IIQ2025 and Federal Total Public Debt Held by the Public at 95.0
Percent of GDP (https://fred.stlouisfed.org/series/GFDEGDQ188S). [Shutdown affects data: https://news.research.stlouisfed.org/2025/09/a-u-s-government-shutdown-could-delay-some-fred-data-2/] The Net International Investment Position of the United
States, or foreign debt, is $26.14 trillion at the end of IIQ2025 (https://www.bea.gov/sites/default/files/2025-09/intinv225.pdf) [Shutdown affects data]. The United States current
account deficit is 3.3 percent of nominal GDP in IIQ2025, “down from 5.9
percent in the first quarter” (https://www.bea.gov/sites/default/files/2025-09/trans225.pdf)
(Next release Jan 14, 2026) [Shutdown affects data].
The Treasury deficit of the United States reached $1.8 trillion in fiscal year
2024 (https://fiscal.treasury.gov/reports-statements/mts/). Total assets of Federal Reserve Banks reached $6.6
trillion on Jan 21, 2026 and securities held outright reached $6.3 trillion (https://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab1). US GDP nominal NSA reached $31.1 trillion in IIIQ2025 (https://apps.bea.gov/iTable/index_nipa.cfm). US GDP contracted at the real seasonally adjusted annual
rate (SAAR) of 1.0 percent in IQ2022 and grew at the SAAR of 0.6 percent in
IIQ2022, growing at 2.9 percent in IIIQ2022, growing at 2.8 percent in IVQ2022,
growing at 2.9 percent in IQ2023, growing at 2.5 percent in IIQ2023 growing at
4.7 percent in IIIQ2023, growing at 3.4 percent in IVQ2023, growing at 0.8
percent in IQ2024, growing at 3.6 percent in IIQ2024, growing at 3.3 percent in
IIIQ2024, growing at 1.9 percent in IVQ2024, contracting at 0.6 percent in
IQ2025, growing at 3.8 percent in IIQ2025 and growing at 4.3 percent in
IIIQ2025 (https://apps.bea.gov/iTable/index_nipa.cfm). [Shutdown affects data] Total
Treasury interest-bearing, marketable debt held by private investors increased
from $3635 billion in 2007 to $16,439 billion in Sep 2021 (Fiscal Year 2021) or
increase by 352.2 percent (https://fiscal.treasury.gov/reports-statements/treasury-bulletin/). John Hilsenrath, writing
on “Economists Seek Recession Cues in the Yield Curve,” published in the Wall
Street Journal on Apr 2, 2022, analyzes the inversion of the Treasury yield
curve with the two-year yield at 2.430 on Apr 1, 2022, above the ten-year yield
at 2.374. Hilsenrath argues that inversion appears to signal recession in
market analysis but not in alternative Fed approach.
The Consumer
Price index of the United States in Chart CPI-H increased 2.7 percent in Dec
2025 Relative to a Year Earlier, The Tenth Highest Since 8.9 percent in Dec
1981 was Followed by the Highest of 9.1 percent in Jun 2022, the Second Highest
of 8.6 percent in May 2022, 8.5 percent in both Jul 2022 and Mar 2022, 8.3
percent in both Apr and Aug 2022, 8.2 percent in Sep 2022, 7.9 percent in
February 2022, 7.5 percent in Jan 2022, 7.7 percent in Oct 2022, 7.1 percent in
Nov 2022, 6.5 percent in Dec 2022, 6.4 percent in Jan 2023, 6.0 percent in Feb
2023, 5.0 percent in Mar 2023, 4.9 percent in Apr 2023, 4.0 percent in May
2023, 3.0 percent in Jun 2023, 3.2 percent in Jul 2023, 3.7 percent in Aug
2023, 3.7 percent in Sep 2023, 3.2 percent in Oct 2023, 3.1 percent in Nov
2023, 3.4 percent in Dec 2023, 3.1 percent in Jan 2024, 3.2 percent in Feb
2024, 3.5 percent in Mar 2024, 3.4 percent in Apr 2024, 3.3 percent in May
2024, 3.0 in Jun 2024, 2.9 percent in Jul 2024, 2.5 percent in Aug 2024, 2.4
percent in Sep 2024, 2.6 percent in Oct 2024, 2.7 percent in Nov 2024, 2.9
percent in Dec 2024, 3.0 percent in Jan 2025, 2.8 percent in Feb 2025, 2.4
percent in Mar 2025, 2.3 percent in Apr 2025, 2.4 percent in May 2025, 2.7
percent in Jun 2025, 2.7 percent in Jul 2025, 2.9 percent in Aug 2025, 3.0
percent in Sep 2025, no observations available (NA) for Oct 2025 during the
shutdown, 2.7 percent in Nov 2025 and 2.7 percent in Dec 2025.
Chart CPI-H, US, Consumer Price Index, 12-Month
Percentage Change, NSA, 1981-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
Table CPI-H, US,
Consumer Price Index, 12-Month Percentage Change, NSA,
1981-1983, 2019-2025
|
Year |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
|
1981 |
11.8 |
11.4 |
10.5 |
10.0 |
9.8 |
9.6 |
|
1982 |
8.4 |
7.6 |
6.8 |
6.5 |
6.7 |
7.1 |
|
1983 |
3.7 |
3.5 |
3.6 |
3.9 |
3.5 |
2.6 |
|
2019 |
1.6 |
1.5 |
1.9 |
2.0 |
1.8 |
1.6 |
|
2020 |
2.5 |
2.3 |
1.5 |
0.3 |
0.1 |
0.6 |
|
2021 |
1.4 |
1.7 |
2.6 |
4.2 |
5.0 |
5.4 |
|
2022 |
7.5 |
7.9 |
8.5 |
8.3 |
8.6 |
9.1 |
|
2023 |
6.4 |
6.0 |
5.0 |
4.9 |
4.0 |
3.0 |
|
2024 |
3.1 |
3.2 |
3.5 |
3.4 |
3.3 |
3.0 |
|
2025 |
3.0 |
2.8 |
2.4 |
2.3 |
2.4 |
2.7 |
|
Year |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
|
1981 |
10.8 |
10.8 |
11.0 |
10.1 |
9.6 |
8.9 |
|
1982 |
6.4 |
5.9 |
5.0 |
5.1 |
4.6 |
3.8 |
|
1983 |
2.5 |
2.6 |
2.9 |
2.9 |
3.3 |
3.8 |
|
2019 |
1.8 |
1.7 |
1.7 |
1.8 |
2.1 |
2.3 |
|
2020 |
1.0 |
1.3 |
1.4 |
1.2 |
1.2 |
1.4 |
|
2021 |
5.4 |
5.3 |
5.4 |
6.2 |
6.8 |
7.0 |
|
2022 |
8.5 |
8.3 |
8.2 |
7.7 |
7.1 |
6.5 |
|
2023 |
3.2 |
3.7 |
3.7 |
3.2 |
3.1 |
3.4 |
|
2024 |
2.9 |
2.5 |
2.4 |
2.6 |
2.7 |
2.9 |
|
2025 |
2.7 |
2.9 |
3.0 |
2.7 |
2.7 |
Note: NA because of interruption of
appropriations.
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
Chart VII-3 of the Energy Information Administration
provides the US retail price of regular gasoline. The price moved to $2.806 per
gallon on Jan 19, 2026, from $3.109 a year earlier or minus 9.7 percent.
https://www.eia.gov/petroleum/weekly/ [Chart discontinued See Weekly Petroleum Status Report.]
Chart
VII-3A provides the US retail price of regular gasoline, dollars per gallon,
from $1.191 on Aug 20,1990 to $2.806 on Jan 19, 2026 or 135.6 percent. The
price of retail regular gasoline increased from $2.249/gallon on Jan 4,2021 to
$2.806/gallon on Jan 19, 2026, or 24.8 percent. The price of retail regular
gasoline decreased from $3.530/gallon on Feb 21, 2022, two days before the
invasion of Ukraine, to $2.806/gallon on Jan 19, 2026 or minus 20.5 percent and
had increased 57.0 percent from $2.249/gallon on Jan 4,2021 to $3.530/gallon on
Feb 28, 2022.
Chart VII-3A, US Retail Price of Regular Gasoline,
Dollars Per Gallon
Source: US Energy Information Administration
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPMR_PTE_NUS_DPG&f=W
Chart
VII-4 of the Energy Information Administration provides the price of the
Natural Gas Futures Contract increasing from $2.581 per million Btu on Jan 4,
2021 to $5.326 per million Btu on Dec 20, 2022 or 106.4 percent and closing at
$1.785 on Apr 5, 2024 or change of minus 66.5 percent.
Chart VII-4, US, Natural Gas Futures Contract 1
Source: US Energy Information Administration
https://www.eia.gov/dnav/ng/hist/rngc1d.htm
Chart VII-5 of the US Energy Administration provides US
field production of oil moving from a high of 12.983 thousand barrels per day
in Dec 2019 to 11.760 thousand barrels per day in Dec 2021 and the final point
of 13.870 thousand barrels per day in Oct 2025.
Chart
VII-5 United States Field Production of Crude Oil, Thousand Barrels Per Day
Sources: US Energy Information Administration https://www.eia.gov/dnav/pet/hist/leafhandler.ashx?n=pet&s=mcrfpus2&f=m
Chart
VII-6 of the US Energy Information Administration provides net imports of crude
oil and petroleum products. Net imports changed from 1967 thousand barrels per
day in the first week of Dec 2020 to minus -3216 thousand barrels in the fourth
week of Oct 25, 2024, minus 3310 thousand barrels in the second week of Dec 13,
2024 and minus 2.374 thousand barrels in the second week of Jan 9, 2026.
Chart VII-6, US, Net Imports of Crude Oil and Petroleum
Products, Thousand Barrels Per Day
Source: US Energy Information Administration
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WTTNTUS2&f=W
Chart VI-7 of the EIA provides US Petroleum
Consumption, Production, Imports, Exports and Net Imports 1950-2022. There was
sharp increase in production in the final segment that reached consumption by
2020. There is reversal in 2021 with consumption exceeding production.
Chart VI-7, US Petroleum Consumption, Production,
Imports, Exports and Net Imports 1950-2022, Million Barrels Per Day
https://www.eia.gov/energyexplained/oil-and-petroleum-products/imports-and-exports.php
Chart
VI-8 provides the US average retail price of electricity at 12.78 cents per
kilowatthour in Dec 2020 increasing to 17.98 cents per kilowatthour in Oct 2025
or 40.7 per cent.
Chart VI-8, US Average Retail Price of Electricity,
Monthly, Cents per Kilowatthour
United States
manufacturing output from 1919 to 2025 monthly is in Chart I-4 of the Board of
Governors of the Federal Reserve System. The second industrial revolution of
Jensen (1993) is quite evident in the acceleration of the rate of growth of
output given by the sharper slope in the 1980s and 1990s. Growth was robust
after the shallow recession of 2001 but dropped sharply during the global
recession after IVQ2007. Manufacturing output recovered sharply but has not
reached earlier levels and is losing momentum at the margin. There is cyclical
uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar
behavior in manufacturing. There is classic research on analyzing deviations of
output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975,
Sargent and Sims 1977). The long-term trend is growth of manufacturing at average
2.8 percent per year from Nov 1919 to Nov 2025. Growth at 2.8 percent per year
would raise the NSA index of manufacturing output (SIC, Standard Industrial
Classification) from 108.5636 in Dec 2007 to 178.0579 in Nov 2025. The actual
index NSA in Nov 2025 is 96.9756 which is 45.5 percent below trend. The
underperformance of manufacturing in Mar-Nov 2020 originates partly in the
earlier global recession augmented by the global recession, with output in the
US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19
event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Manufacturing
output grew at average 1.5 percent between Dec 1999 and Dec 2006. Using trend
growth of 1.5 percent per year, the index would increase to 141.7537 in Nov
2025. The output of manufacturing at 96.9756 in Nov 2025 is 31.6 percent below
trend under this alternative calculation. Using the NAICS (North American Industry Classification
System), manufacturing output fell from the high of 105.8434 in Jun 2007 to the
low of 85.6368 in Apr 2009 or 19.1 percent. The NAICS manufacturing index
increased from 85.6368 in Apr 2009 to 97.7127 in Nov 2025 or 14.1 percent. The
NAICS manufacturing index increased at the annual equivalent rate of 3.4
percent from Dec 1986 to Dec 2006. Growth at 3.4 percent would increase the
NAICS manufacturing output index from 106.6125 in Dec 2007 to 194.0744 in Nov
2025. The NAICS index at 97.7127 in Nov 2025 is 49.7 percent below trend. The
NAICS manufacturing output index grew at 1.7 percent annual equivalent from Dec
1999 to Dec 2006. Growth at 1.7 percent would raise the NAICS manufacturing
output index from 105.8434 in Dec 2007 to 144.2034 in Nov 2025. The NAICS index
at 97.7127 in Nov 2025 is 32.2 percent below trend under this alternative
calculation.
Chart I-4, US, Manufacturing Output, 1919-2025
Source: Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/releases/g17/Current/default.htm
Chart I-4B provides
the data for the period 2007-2025 SIC US Manufacturing. There has not been
recovery from the higher levels before the recession from Dec 2007 to Aug 2009
(https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions).
%5b1%5d.jpg)
Chart I-4B, US, Manufacturing Output, 2007-2025
htps://www.federalreserve.gov/releases/g17/Current/default.htm
Chart
I-7 of the Board of Governors of the Federal Reserve System shows that output
of durable manufacturing accelerated in the 1980s and 1990s with slower growth
in the 2000s perhaps because processes matured. Growth was robust after the
major drop during the global recession but appears to vacillate in the final
segment. There is sharp contraction in Mar-Apr 2020 in the global recession,
with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19
event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). There is initial recovery in May 2020-Oct 2022 with
deterioration/weakness and renewed oscillating growth in Nov 2022-Nov 2025.
%5b1%5d.jpg)
Chart I-7, US, Output of Durable Manufacturing, 2007-2025
Source: Board of Governors of the Federal Reserve System
htps://www.federalreserve.gov/releases/g17/Current/default.htm
Chart I-7B provides NAICS Durable Manufacturing from 2007 to 2025. There has not been recovery from the higher levels before
the recession from Dec 2007 to Aug 2009 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions).
%5b1%5d.jpg)
Chart I-7B, US, Output of Durable Manufacturing, 2007-2025
Source: Board of Governors of the Federal Reserve System
htps://www.federalreserve.gov/releases/g17/Current/default.htm
Chart
V-3D provides the index of US manufacturing (NAICS) from Jan 1972 to Nov 2025.
The index continued increasing during the decline of manufacturing jobs after
the early 1980s. There are likely effects of changes in the composition of
manufacturing with also changes in productivity and trade. There is sharp
decline in the global recession,
with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19
event and the trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).
Chart V-3D, United States Manufacturing (NAICS) NSA, Jan
1972 to Nov 2025
Source: Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/releases/g17/Current/default.htmh
Chart V-3DB provides NAICS Manufacturing from 2007 to 2025. There has not been recovery from the higher levels before
the recession from Dec 2007 to Nov 2009 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions).
Chart V-3DB, United States Manufacturing (NAICS) NSA, Jan
2007 to Nov 2025
Source: Board of Governors of the Federal Reserve System
https://www.federalreserve.gov/releases/g17/Current/default.htm
Chart VII-9 provides the fed funds rate and Three
Months, Two-Year and Ten-Year Treasury Constant Maturity Yields. Unconventional
monetary policy of near zero interest rates is typically followed by financial
and economic stress with sharp increases in interest rates.
Chart VII-9, US Fed Funds Rate and Three-Month, Two-Year
and Ten-Year Treasury Constant Maturity Yields, Jan 2, 1994 to 2022-2023
Source: Federal Reserve Board of the Federal Reserve System
https://www.federalreserve.gov/releases/h15/
Note: program does not download the
entire right-side of the chart.
Chart VII-9A, US Fed Funds Rate and Three-Month, Two-Year
and Ten-Year Treasury Constant Maturity Yields, Jan 2, 2022 to May 30,
2023
Source: Federal Reserve Board of the Federal Reserve System
https://www.federalreserve.gov/releases/h15/
Note: Chart is shortened of current dates in download.
Chart VI-14 provides the overnight fed funds rate, the
yield of the 10-year Treasury constant maturity bond, the yield of the 30-year
constant maturity bond and the conventional mortgage rate from Jan 1991 to Dec
1996. In Jan 1991, the fed funds rate was 6.91 percent, the 10-year Treasury
yield 8.09 percent, the 30-year Treasury yield 8.27 percent and the
conventional mortgage rate 9.64 percent. Before monetary policy tightening in
Oct 1993, the rates and yields were 2.99 percent for the fed funds, 5.33 percent
for the 10-year Treasury, 5.94 for the 30-year Treasury and 6.83 percent for
the conventional mortgage rate. After tightening in Nov 1994, the rates and
yields were 5.29 percent for the fed funds rate, 7.96 percent for the 10-year
Treasury, 8.08 percent for the 30-year Treasury and 9.17 percent for the
conventional mortgage rate.
Chart VI-14, US, Overnight Fed Funds Rate, 10-Year
Treasury Constant Maturity, 30-Year Treasury Constant Maturity and Conventional
Mortgage Rate, Monthly, Jan 1991 to Dec 1996
Source: Board of Governors of the Federal Reserve
System
http://www.federalreserve.gov/releases/h15/update/
Chart VI-15 of the Bureau of Labor Statistics provides
the all items consumer price index from Jan 1991 to Dec 1996. There does not
appear acceleration of consumer prices requiring aggressive tightening.
Chart VI-15, US, Consumer Price Index All Items, Jan
1991 to Dec 1996
Source: Bureau of Labor Statistics
https://www.bls.gov/cpi/data.htm
Chart IV-16 of the Bureau of Labor Statistics provides
12-month percentage changes of the all items consumer price index from Jan 1991
to Dec 1996. Inflation collapsed during the recession from Jul 1990 (III) and
Mar 1991 (I) and the end of the Kuwait War on Feb 25, 1991 that stabilized
world oil markets. CPI inflation remained almost the same and there is no valid
counterfactual that inflation would have been higher without monetary policy
tightening because of the long lag in effect of monetary policy on inflation
(see Culbertson 1960, 1961, Friedman 1961, Batini and Nelson 2002, Romer and
Romer 2004). Policy tightening had adverse collateral effects in the form of
emerging market crises in Mexico and Argentina and fixed income markets
worldwide.
Chart VI-16, US, Consumer Price Index All Items,
Twelve-Month Percentage Change, Jan 1991 to Dec 1996
Source: Bureau of Labor Statistics
https://www.bls.gov/cpi/data.htm
Chart USFX provides the exchange rate of US Dollars
per EURO from 2007 to 2023. Barry Eichengreen and Jeffrey Sachs, Exchange Rates
and Economic Recovery in the 1930s, The Journal of Economic History, Vol. 45, No. 4 (Dec 1985),
argue that foreign exchange “depreciation was clearly beneficial for initiating
countries” during the Great Depression of the 1930s and that it was no
equivalent to “beggar my neighbor” policies such as tariffs.
Chart USFX, Exchange Rate USD/EURO 2007-2023
Source: https://www.federalreserve.gov/releases/h10/current/
Chart USFX, Exchange Rate USD/EURO 2000-2023
Source: https://www.federalreserve.gov/releases/h10/current/
Federal Reserve Bank of St. Louis https://fred.stlouisfed.org/
Chart USFX, Exchange Rate USD/EURO 2018-2023
Source: https://www.federalreserve.gov/releases/h10/current/
Federal Reserve Bank of St. Louis https://fred.stlouisfed.org/
Table
USFX provides the rate of USD/EURO in selected months. The dollar appreciated
sharply from USD 1.2254 on Jan 4, 2021 to 1.0787 on Aug 25, 2023 and 1.1599 on
Jan 16, 2026.
Table USFX, USD/EURO Selected Months
|
Date |
USD/EUR |
|
1/4/2021 |
1.2254 |
|
1/5/2021 |
1.2295 |
|
1/6/2021 |
1.229 |
|
1/7/2021 |
1.2265 |
|
1/8/2021 |
1.2252 |
|
1/11/2021 |
1.2169 |
|
1/12/2021 |
1.2168 |
|
1/13/2021 |
1.2159 |
|
1/14/2021 |
1.2156 |
|
1/15/2021 |
1.2099 |
|
1/31/2023 |
1.0858 |
|
2/1/2023 |
1.0917 |
|
2/2/2023 |
1.0918 |
|
2/3/2023 |
1.0825 |
|
2/6/2023 |
1.0722 |
|
2/7/2023 |
1.0705 |
|
2/8/2023 |
1.0734 |
|
2/9/2023 |
1.0761 |
|
2/10/2023 |
1.0670 |
|
2/13/2023 |
1.0718 |
|
2/14/2023 |
1.0722 |
|
2/15/2023 |
1.0683 |
|
2/16/2023 |
1.0684 |
|
2/17/2023 |
1.0678 |
|
2/24/2023 |
1.0545 |
|
3/03/2023 |
1.0616 |
|
3/10/2023 |
1.0659 |
|
3/17/2023 |
1.0647 |
|
3/24/2023 |
1.0762 |
|
3/31/2023 |
1.0872 |
|
4/7/2023 |
1.0913 |
|
4/14/2023 |
1.0980 |
|
4/21/2023 |
1.0973 |
|
4/28/2023 |
1.1040 |
|
5/5/2023 |
1.1026 |
|
5/26/2023 |
1.0713 |
|
6/2/2023 |
1.0724 |
|
6/9/2023 |
1.0749 |
|
6/16/2023 |
1.0925 |
|
6/23/2023 |
1.0887 |
|
6/30/2023 |
1.0920 |
|
7/7/2023 |
1.0964 |
|
7/14/2023 |
1.1237 |
|
7/21/2023 |
1.1120 |
|
7/28/2023 |
1.1039 |
|
8/4/2023 |
1.1036 |
|
8/11/2023 |
1.0957 |
|
8/18/2023 |
1.0875 |
|
8/25/2023 |
1.0787 |
|
9/1/223 |
1.0787 |
|
9/8/2023 |
1.0709 |
|
9/15/2023 |
1.0673 |
|
9/22/2023 |
1.0660 |
|
9/29/2023 |
1.0584 |
|
10/6/2023 |
1.0596 |
|
10/13/2023 |
1.0502 |
|
10/20/2023 |
1.0592 |
|
10/27/2023 |
1.0592 |
|
11/3/2023 |
1.0733 |
|
11/10/2023 |
1.0710 |
|
11/17/2023 |
1.0879 |
|
11/24/2023 |
1.0934 |
|
12/1/2023 |
1.0878 |
|
12/8/2023 |
1.0746 |
|
12/15/2023 |
1.0906 |
|
6/21/2024 |
1.0694 |
|
2/7/2025 |
1.0329 |
|
1/16/2026 |
1.1599 |
Source: https://www.federalreserve.gov/releases/h10/current/
U.S.
International Trade in Goods and Services, October 2025
|
October 2025 |
-$29.4 B |
|
September 2025 |
-$48.1 B |
The U.S. goods and
services trade deficit decreased in October 2025 according to the U.S. Bureau
of Economic Analysis and the U.S. Census Bureau. The deficit decreased from
$48.1 billion in September (revised) to $29.4 billion in October, as exports
increased and imports decreased. The goods deficit decreased $19.2 billion in
October to $59.1 billion. The services surplus decreased $0.4 billion in
October to $29.8 billion.
- Current release: January 8, 2026
- Next release: January 29, 2026
- Current release: January 8, 2026
- Next release: January 29, 2026
Source: https://www.bea.gov/data/intl-trade-investment/international-trade-goods-and-services [Data are not being updated during shutdown.]
A comprehensive analysis of the Mill-Bickerdike theorem and the Lerner
theorem on tariffs and international terms of trade with application to the
Brazilian coffee support program, the recovery of Brazil from the Great
Depression and Brazil’s industrialization is in Carlos Manuel Pelaez, História
da Industrialização Brasileira. Rio de Janeiro, APEC Editora, 1972.
Chart IID-1B provides the US terms of trade index, index of
terms of trade of nonpetroleum goods and index of terms of trade of goods with
the new base of 2017. The terms of trade of nonpetroleum goods dropped sharply
from the mid-1980s to 1995, recovering significantly until 2014, dropping and
then recovering again into 2021. There is relative stability in the terms of
trade of nonpetroleum goods from 1967 to 2025 but sharp deterioration in the
overall index and the index of goods.
Chart IID-1B, United States Terms of Trade Indexes
1967-2025, Quarterly
Source: Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm [Data are not being updated during
shutdown.]
Percentage shares of net trade (exports
less imports), exports and imports in US Gross Domestic Product are in Chart
IA1-14 from 1979 to 2025. There is sharp trend of decline of exports and
imports after the global recession beginning in IVQ2007. Net trade has been
subtracting from growth since the stagflation of the 1970s.
Chart IA1-14, US, Percentage Shares of Net Trade, Exports
and Imports in Gross Domestic Product, Quarterly, 1979-2025
Source: US Bureau of Economic Analysis
https://apps.bea.gov/iTable/index_nipa.cfm
[Data are not being updated during shutdown.]
Table
B provides the exchange rate of Brazil and the trade balance from 1927 to 1939.
“Currency depreciation in the 1930s…benefitted the initiating countries…There
can be no presumption that depreciation was beggar-thy-neighbor…competitive
devaluation taken by a group of countries had they been even more widely
adopted and coordinated internationally would have hasted recovery from the
Great Depression,” Barry Eichengreen and Jeffrey Sachs, “Exchange Rates and
Economic Recovery in the1930s,” Journal of Economic History, Vol. 45,
No. 4 (Dec., 1985), pp.925-946.
Table B, Brazil, Exchange Rate and Trade Balance,
1927-1939
|
Year |
Exchange Rate Mil-Réis per £ |
Trade Balance 1000 Contos |
||
|
1927 |
40.6 |
370.9 |
||
|
1928 |
40.3 |
275.3 |
||
|
1929 |
40.6 |
332.7 |
||
|
1930 |
49.4 |
563.6 |
||
|
1931 |
62.4 |
1517.2 |
||
|
1932 |
48.1 |
1018.1 |
||
|
1933 |
52.6 |
655 |
||
|
1934 |
59.7 |
956.2 |
||
|
1935 |
57.9 |
248.1 |
||
|
1936 |
58.4 |
626.8 |
||
|
1937 |
56.9 |
-222.5 |
||
|
1938 |
57.6 |
-98.7 |
||
|
1939 |
71.1 |
631.9 |
Source: Carlos
Manuel Peláez, Análise Econômica do Programa Brasileiro de Sustentação do Café
1906-1945: Teoria, Política e Medição, Revista Brasileira de Economia,
Vol. 25, N 4, Out/Dez 1971, 5-213.
Christina D. Romer argues that growth of the money
stock was critical in the recovery of the United States from the Great
Depression (Christina D. Romer, What ended the Great Depression? The Journal of Economic
History,
Volume 52, Number 4, Dec 1992, pp 757-784).
Table C, Brazil, Yearly Percentage Changes of the Money
Stock, M1 and M2, Exchange Rate, Terms of Trade, Industrial Production, Real
Gross National Product and Real Gross Income Per Capita, 1930-1939
|
Period |
M1 |
M2 |
Exchange Rate |
Terms of Trade |
Industrial Production |
Real GNP |
Real Gross Income Per Capita |
|
1929/30 |
-9 |
-4 |
22 |
-34 |
-5 |
-1 |
-10 |
|
1930/31 |
4 |
1 |
26 |
-5 |
8 |
-3 |
-6 |
|
1931/32 |
15 |
7 |
-23 |
8 |
0 |
6 |
2 |
|
1932/33 |
10 |
4 |
10 |
-15 |
16 |
10 |
7 |
|
1933/34 |
5 |
6 |
13 |
5 |
13 |
7 |
5 |
|
1934/35 |
7 |
8 |
-3 |
-28 |
14 |
1 |
-4 |
|
1935/36 |
10 |
11 |
1 |
2 |
14 |
12 |
9 |
|
1936/37 |
10 |
9 |
-3 |
2 |
7 |
3 |
0 |
|
1937/38 |
19 |
13 |
1 |
-11 |
6 |
4 |
-1 |
|
1938/39 |
0 |
8 |
23 |
-12 |
14 |
4 |
2 |
Source: Carlos
Manuel Peláez and Wilson Suzigan, História Monetária do Brasil. Segunda
Edição Revisada e Ampliada. Coleção Temas Brasileiros, Universidade de
Brasília, 1981.
“In
the period of the free coffee market 1857-1906, international coffee prices
fluctuated in cycles of increasing amplitude. British export prices decreased
at a low average rate, and physical exports of coffee by Brazil increased at
the average rate of 2.9 percent per year. The income terms of trade of the
coffee economy of Brazil improved at the average compound rate of 4.0 percent
per year. But the actual rate must have been much higher because of drastic
improvements in the quality of manufactures while the quality of coffee
remained relatively constant,” Carlos Manuel Peláez, “The Theory and Reality of
Imperialism in the Coffee Economy of Nineteenth-Century Brazil,” The
Economic History Review, Second Series, Volume XXIX, No. 2, May 1976.
276-290. See Carlos Manuel Peláez, “A Comparison of Long-Term Monetary Behavior
and Institutions in Brazil, Europe and the United States,” The Journal of
European Economic History, Volume 5, Number 2, Fall 1976, 439-450,
Presented at the Sixth International Congress of Economic History, Section
on Monetary Inflation in Historical Perspective, Copenhagen, 22 Aug
1974.
In his classic restatement of the Keynesian demand
function in terms of “liquidity preference as behavior toward risk,” James
Tobin (http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1981/tobin-bio.html) identifies the risks of low interest rates in terms
of portfolio allocation (Tobin 1958, 86):
“The assumption that investors expect on balance no
change in the rate of interest has been adopted for the theoretical reasons
explained in section 2.6 rather than for reasons of realism. Clearly investors
do form expectations of changes in interest rates and differ from each other in
their expectations. For the purposes of dynamic theory and of analysis of
specific market situations, the theories of sections 2 and 3 are complementary
rather than competitive. The formal apparatus of section 3 will serve just as
well for a non-zero expected capital gain or loss as for a zero expected value
of g. Stickiness of interest rate expectations would mean that the expected
value of g is a function of the rate of interest r, going down when r goes down
and rising when r goes up. In addition to the rotation of the opportunity locus
due to a change in r itself, there would be a further rotation in the same
direction due to the accompanying change in the expected capital gain or loss. At
low interest rates expectation of capital loss may push the opportunity locus
into the negative quadrant, so that the optimal position is clearly no consols,
all cash. At the other extreme, expectation of capital gain at high
interest rates would increase sharply the slope of the opportunity locus and
the frequency of no cash, all consols positions, like that of Figure 3.3. The
stickier the investor's expectations, the more sensitive his demand for cash
will be to changes in the rate of interest (emphasis added).”
Tobin (1969) provides more elegant, complete analysis
of portfolio allocation in a general equilibrium model. The major point is
equally clear in a portfolio consisting of only cash balances and a perpetuity
or consol. Let g be the capital gain, r the rate of interest on
the consol and re the expected rate of interest. The rates
are expressed as proportions. The price of the consol is the inverse of the
interest rate, (1+re). Thus, g = [(r/re)
– 1]. The critical analysis of Tobin is that at extremely low interest rates
there is only expectation of interest rate increases, that is, dre>0,
such that there is expectation of capital losses on the consol, dg<0.
Investors move into positions combining only cash and no consols.
Valuations of risk financial assets would collapse in reversal of long
positions in carry trades with short exposures in a flight to cash. There is no
exit from a central bank created liquidity trap without risks of financial
crash and another global recession. The net worth of the economy depends on
interest rates. In theory, “income is generally defined as the amount a
consumer unit could consume (or believe that it could) while maintaining its
wealth intact” (Friedman 1957, 10). Income, Y, is a flow that is
obtained by applying a rate of return, r, to a stock of wealth, W,
or Y = rW (Friedman 1957). According to a subsequent statement:
“The basic idea is simply that individuals live for many years and that
therefore the appropriate constraint for consumption is the long-run expected
yield from wealth r*W. This yield was named permanent income: Y*
= r*W” (Darby 1974, 229), where * denotes permanent. The
simplified relation of income and wealth can be restated as:
W = Y/r (1)
Equation (1) shows that as r goes to zero, r→0,
W grows without bound, W→∞. Unconventional monetary policy lowers
interest rates to increase the present value of cash flows derived from
projects of firms, creating the impression of long-term increase in net worth.
An attempt to reverse unconventional monetary policy necessarily causes
increases in interest rates, creating the opposite perception of declining net
worth. As r→∞, W = Y/r →0. There is no exit from
unconventional monetary policy without increasing interest rates with resulting
pain of financial crisis and adverse effects on production, investment and
employment.
Inflation and unemployment in the period 1966 to 1985
is analyzed by Cochrane (2011Jan, 23) by means of a Phillips circuit joining
points of inflation and unemployment. Chart VI-1B for Brazil in Pelaez (1986,
94-5) was reprinted in The Economist in the issue of Jan 17-23, 1987 as
updated by the author. Cochrane (2011Jan, 23) argues that the Phillips circuit
shows the weakness in Phillips curve correlation. The explanation is by a shift
in aggregate supply, rise in inflation expectations or loss of anchoring. The
case of Brazil in Chart VI-1B cannot be explained without taking into account
the increase in the fed funds rate that reached 22.36 percent on Jul 22, 1981 (http://www.federalreserve.gov/releases/h15/data.htm) in the Volcker Fed that precipitated the stress on a
foreign debt bloated by financing balance of payments deficits with bank loans
in the 1970s. The loans were used in projects, many of state-owned enterprises
with low present value in long gestation. The combination of the insolvency of
the country because of debt higher than its ability of repayment and the huge
government deficit with declining revenue as the economy contracted caused
adverse expectations on inflation and the economy. This interpretation is
consistent with the case of the 24 emerging market economies analyzed by
Reinhart and Rogoff (2010GTD, 4), concluding that “higher debt levels are
associated with significantly higher levels of inflation in emerging markets.
Median inflation more than doubles (from less than seven percent to 16 percent)
as debt rises frm the low (0 to 30 percent) range to above 90 percent. Fiscal
dominance is a plausible interpretation of this pattern.”
The reading of the Phillips circuits of the 1970s by
Cochrane (2011Jan, 25) is doubtful about the output gap and inflation
expectations:
“So, inflation is caused by ‘tightness’ and deflation
by ‘slack’ in the economy. This is not just a cause and forecasting
variable, it is the cause, because given ‘slack’ we apparently do not
have to worry about inflation from other sources, notwithstanding the weak
correlation of [Phillips circuits]. These statements [by the Fed] do mention
‘stable inflation expectations. How does the Fed know expectations are ‘stable’
and would not come unglued once people look at deficit numbers? As I read Fed
statements, almost all confidence in ‘stable’ or ‘anchored’ expectations comes
from the fact that we have experienced a long period of low inflation (adaptive
expectations). All these analyses ignore the stagflation experience in the
1970s, in which inflation was high even with ‘slack’ markets and little
‘demand, and ‘expectations’ moved quickly. They ignore the experience of
hyperinflations and currency collapses, which happen in economies well below
potential.”
Yellen (2014Aug22) states that “Historically, slack has
accounted for only a small portion of the fluctuations in inflation. Indeed,
unusual aspects of the current recovery may have shifted the lead-lag
relationship between a tightening labor market and rising inflation pressures
in either direction.”
Chart VI-1B provides the tortuous Phillips Circuit of
Brazil from 1963 to 1987. There were no reliable consumer price index and
unemployment data in Brazil for that period. Chart VI-1B used the more reliable
indicator of inflation, the wholesale price index, and idle capacity of
manufacturing as a proxy of unemployment in large urban centers.
Chart VI1-B, Brazil, Phillips Circuit, 1963-1987
Source:
©Carlos Manuel Pelaez, O Cruzado e o Austral: Análise das Reformas
Monetárias do Brasil e da Argentina. São
Paulo: Editora Atlas, 1986, pages 94-5. Reprinted in: Brazil. Tomorrow’s Italy,
The Economist, 17-23 January 1987, page 25.
I D Current US
Inflation. Unconventional monetary policy of zero interest rates and
large-scale purchases of long-term securities for the balance sheet of the
central bank is proposed to prevent deflation. The data of CPI inflation of all
goods and CPI inflation excluding food and energy for the past six decades does
not show even one negative change, as shown in Table CPIEX. There is
acceleration in 2021 with 3.6 percent, 2022 with 6.2 percent and slower in 2023
with 4.8 percent, slower in 2024 with 3.4 percent and decreasing to 2.8 percent
in 2025.
Table CPIEX, Annual
Percentage Changes of the CPI All Items Excluding Food and Energy
|
Year |
Annual
∆% |
|
1958 |
2.4 |
|
1959 |
2.0 |
|
1960 |
1.3 |
|
1961 |
1.3 |
|
1962 |
1.3 |
|
1963 |
1.3 |
|
1964 |
1.6 |
|
1965 |
1.2 |
|
1966 |
2.4 |
|
1967 |
3.6 |
|
1968 |
4.6 |
|
1969 |
5.8 |
|
1970 |
6.3 |
|
1971 |
4.7 |
|
1972 |
3.0 |
|
1973 |
3.6 |
|
1974 |
8.3 |
|
1975 |
9.1 |
|
1976 |
6.5 |
|
1977 |
6.3 |
|
1978 |
7.4 |
|
1979 |
9.8 |
|
1980 |
12.4 |
|
1981 |
10.4 |
|
1982 |
7.4 |
|
1983 |
4.0 |
|
1984 |
5.0 |
|
1985 |
4.3 |
|
1986 |
4.0 |
|
1987 |
4.1 |
|
1988 |
4.4 |
|
1989 |
4.5 |
|
1990 |
5.0 |
|
1991 |
4.9 |
|
1992 |
3.7 |
|
1993 |
3.3 |
|
1994 |
2.8 |
|
1995 |
3.0 |
|
1996 |
2.7 |
|
1997 |
2.4 |
|
1998 |
2.3 |
|
1999 |
2.1 |
|
2000 |
2.4 |
|
2001 |
2.6 |
|
2002 |
2.4 |
|
2003 |
1.4 |
|
2004 |
1.8 |
|
2005 |
2.2 |
|
2006 |
2.5 |
|
2007 |
2.3 |
|
2008 |
2.3 |
|
2009 |
1.7 |
|
2010 |
1.0 |
|
2011 |
1.7 |
|
2012 |
2.1 |
|
2013 |
1.8 |
|
2014 |
1.7 |
|
2015 |
1.8 |
|
2016 |
2.2 |
|
2017 |
1.8 |
|
2018 |
2.1 |
|
2019 |
2.2 |
|
2020 |
1.7 |
|
2021 |
3.6 |
|
2022 |
6.2 |
|
2023 |
4.8 |
|
2024 |
3.4 |
|
2025 |
2.8 |
Source: US Bureau of
Labor Statistics https://www.bls.gov/cpi/data.htm
Table I-2 provides
annual percentage changes of United States consumer price inflation from 1914
to 2025. There have been only cases of annual declines of the CPI after wars:
- World War I
minus 10.5 percent in 1921 and minus 6.1 percent in 1922 following
cumulative increases of 83.5 percent in four years from 1917 to 1920 at
the average of 16.4 percent per year
- World War II:
minus 1.2 percent in 1949 following cumulative 33.9 percent in three years
from 1946 to 1948 at average 10.2 percent per year
- Minus 0.4
percent in 1955 two years after the end of the Korean War
- Minus 0.4
percent in 2009.
The decline of 0.4 percent in 2009 followed an increase
of 3.8 percent in 2008 and is explained by the reversal of speculative carry
trades into commodity futures that were created in 2008 as monetary policy
rates were driven to zero. The reversal occurred after misleading statement on
toxic assets in banks in the proposal for TARP (Cochrane and Zingales 2009).
There were declines of 1.7 percent in both 1927 and 1928 during the episode of
revival of rules of the gold standard. The only persistent deflationary period
since 1914 was during the Great Depression in the years from 1930 to 1933 and
again in 1938-1939. Consumer prices increased only 0.1 percent in 2015 because
of the collapse of commodity prices from artificially high levels induced by
zero interest rates. Consumer prices increased 1.3 percent in 2016, increasing
at 2.1 percent in 2017. Consumer prices increased 2.4 percent in 2018,
increasing 1.8 percent in 2019. Consumer prices increased 1.2 percent in 2020.
Consumer prices increased 4.7 percent in 2021 during fiscal, monetary, and
external imbalances. Consumer prices increased 8.0 percent in 2022 in a
combination of energy policies with fiscal and monetary imbalance. Consumer
prices increased 4.1 percent in 2023 and increased 2.9 percent in 2024. Consumer
prices increased 2.6 percent in 2025. Fear of deflation based on that
experience does not justify unconventional monetary policy of zero interest
rates that has failed to stop deflation in Japan. Financial repression causes
far more adverse effects on allocation of resources by distorting the calculus
of risk/returns than alleged employment-creating effects or there would not be
current recovery without jobs and hiring after zero interest rates since Dec
2008 and intended forever in a self-imposed forecast growth and employment
mandate of monetary policy. Unconventional monetary policy drives wide swings
in allocations of positions into risk financial assets that generate
instability instead of intended pursuit of prosperity without inflation. There
is insufficient knowledge and imperfect tools to maintain the gap of actual
relative to potential output constantly at zero while restraining inflation in
an open interval of (1.99, 2.0). Symmetric targets appear to have been
abandoned in favor of a self-imposed single jobs mandate of easing monetary
policy even with the economy growing at or close to potential output that is
actually a target of growth forecast. The impact on the overall economy and the
financial system of errors of policy are magnified by large-scale policy doses
of trillions of dollars of quantitative easing and zero interest rates. The US
economy has been experiencing financial repression as a result of negative real
rates of interest during nearly a decade and programmed in monetary policy
statements until 2015 or, for practical purposes, forever. The essential
calculus of risk/return in capital budgeting and financial allocations has been
distorted. If economic perspectives are doomed until 2015 such as to warrant
zero interest rates and open-ended bond-buying by “printing” digital bank
reserves (http://cmpassocregulationblog.blogspot.com/2010/12/is-fed-printing-money-what-are.html; see Shultz et al
2012), rational investors and consumers will not invest and consume until just
before interest rates are likely to increase. Monetary policy statements on
intentions of zero interest rates for another three years or recently virtually
forever discourage investment and consumption or aggregate demand that can
increase economic growth and generate more hiring and opportunities to increase
wages and salaries. The doom scenario used to justify monetary policy
accentuates adverse expectations on discounted future cash flows of potential
economic projects that can revive the economy and create jobs. If it were
possible to project the future with the central tendency of the monetary policy
scenario and monetary policy tools do exist to reverse this adversity, why the
tools have not worked before and even prevented the financial crisis? If there
is such thing as “monetary policy science”, why it has such poor record and
current inability to reverse production and employment adversity? There is no excuse
of arguing that additional fiscal measures are needed because they were
deployed simultaneously with similar ineffectiveness. Jon Hilsenrath, writing
on “New view into Fed’s response to crisis,” on Feb 21, 2014, published in the
Wall Street Journal (http://online.wsj.com/news/articles/SB10001424052702303775504579396803024281322?mod=WSJ_hp_LEFTWhatsNewsCollection), analyzes 1865 pages
of transcripts of eight formal and six emergency policy meetings at the Fed in
2008 (http://www.federalreserve.gov/monetarypolicy/fomchistorical2008.htm). If there were an
infallible science of central banking, models and forecasts would provide
accurate information to policymakers on the future course of the economy in
advance. Such forewarning is essential to central bank science because of the
long lag between the actual impulse of monetary policy and the actual full
effects on income and prices many months and even years ahead (Romer and Romer
2004, Friedman 1961, 1953, Culbertson 1960, 1961, Batini and Nelson 2002). Jon
Hilsenrath, writing on “New view into Fed’s response to crisis,” on Feb 21,
2014, published in the Wall Street Journal (http://online.wsj.com/news/articles/SB10001424052702303775504579396803024281322?mod=WSJ_hp_LEFTWhatsNewsCollection), analyzed 1865 pages
of transcripts of eight formal and six emergency policy meetings at the Fed in
2008 (http://www.federalreserve.gov/monetarypolicy/fomchistorical2008.htm). Jon Hilsenrath
demonstrates that Fed policymakers frequently did not understand the current
state of the US economy in 2008 and much less the direction of income and
prices. The conclusion of Friedman (1953) that monetary impulses increase
financial and economic instability because of lags in anticipating needs of
policy, taking policy decisions and effects of decisions. This a fortiori true
when untested unconventional monetary policy in gargantuan doses shocks the
economy and financial markets.
Table I-2, US, Annual
CPI Inflation ∆% 1914-2025
|
Year |
Annual
∆% |
|
1914 |
1.0 |
|
1915 |
1.0 |
|
1916 |
7.9 |
|
1917 |
17.4 |
|
1918 |
18.0 |
|
1919 |
14.6 |
|
1920 |
15.6 |
|
1921 |
-10.5 |
|
1922 |
-6.1 |
|
1923 |
1.8 |
|
1924 |
0.0 |
|
1925 |
2.3 |
|
1926 |
1.1 |
|
1927 |
-1.7 |
|
1928 |
-1.7 |
|
1929 |
0.0 |
|
1930 |
-2.3 |
|
1931 |
-9.0 |
|
1932 |
-9.9 |
|
1933 |
-5.1 |
|
1934 |
3.1 |
|
1935 |
2.2 |
|
1936 |
1.5 |
|
1937 |
3.6 |
|
1938 |
-2.1 |
|
1939 |
-1.4 |
|
1940 |
0.7 |
|
1941 |
5.0 |
|
1942 |
10.9 |
|
1943 |
6.1 |
|
1944 |
1.7 |
|
1945 |
2.3 |
|
1946 |
8.3 |
|
1947 |
14.4 |
|
1948 |
8.1 |
|
1949 |
-1.2 |
|
1950 |
1.3 |
|
1951 |
7.9 |
|
1952 |
1.9 |
|
1953 |
0.8 |
|
1954 |
0.7 |
|
1955 |
-0.4 |
|
1956 |
1.5 |
|
1957 |
3.3 |
|
1958 |
2.8 |
|
1959 |
0.7 |
|
1960 |
1.7 |
|
1961 |
1.0 |
|
1962 |
1.0 |
|
1963 |
1.3 |
|
1964 |
1.3 |
|
1965 |
1.6 |
|
1966 |
2.9 |
|
1967 |
3.1 |
|
1968 |
4.2 |
|
1969 |
5.5 |
|
1970 |
5.7 |
|
1971 |
4.4 |
|
1972 |
3.2 |
|
1973 |
6.2 |
|
1974 |
11.0 |
|
1975 |
9.1 |
|
1976 |
5.8 |
|
1977 |
6.5 |
|
1978 |
7.6 |
|
1979 |
11.3 |
|
1980 |
13.5 |
|
1981 |
10.3 |
|
1982 |
6.2 |
|
1983 |
3.2 |
|
1984 |
4.3 |
|
1985 |
3.6 |
|
1986 |
1.9 |
|
1987 |
3.6 |
|
1988 |
4.1 |
|
1989 |
4.8 |
|
1990 |
5.4 |
|
1991 |
4.2 |
|
1992 |
3.0 |
|
1993 |
3.0 |
|
1994 |
2.6 |
|
1995 |
2.8 |
|
1996 |
3.0 |
|
1997 |
2.3 |
|
1998 |
1.6 |
|
1999 |
2.2 |
|
2000 |
3.4 |
|
2001 |
2.8 |
|
2002 |
1.6 |
|
2003 |
2.3 |
|
2004 |
2.7 |
|
2005 |
3.4 |
|
2006 |
3.2 |
|
2007 |
2.8 |
|
2008 |
3.8 |
|
2009 |
-0.4 |
|
2010 |
1.6 |
|
2011 |
3.2 |
|
2012 |
2.1 |
|
2013 |
1.5 |
|
2014 |
1.6 |
|
2015 |
0.1 |
|
2016 |
1.3 |
|
2017 |
2.1 |
|
2018 |
2.4 |
|
2019 |
1.8 |
|
2020 |
1.2 |
|
2021 |
4.7 |
|
2022 |
8.0 |
|
2023 |
4.1 |
|
2024 |
2.9 |
|
2025 |
2.6 |
Source: US Bureau of
Labor Statistics https://www.bls.gov/cpi/data.htm
Chart
I-12 provides the consumer price index from 1913 to 2025. There is an upward
trend after the 1960s and sharp upward trend recently.
Chart I-12, US, Consumer Price Index,
NSA, 1913-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
Chart
I-13 provides 12-month percentage changes of the consumer price index from 1914
to 2024. The only episode of deflation after 1950 is in 2009, which is
explained by the reversal of speculative commodity futures carry trades that
were induced by interest rates driven to zero in a shock of monetary policy in
2008. The only persistent case of deflation is from 1930 to 1933, which has
little if any relevance to the contemporary United States economy. There are
actually three waves of inflation in the second half of the 1960s, in the
mid-1970s and again in the late 1970s. Inflation rates then stabilized in a
range with only two episodes above 5 percent. There are current higher rates of
inflation.
Chart I-13, US,
Consumer Price Index, All Items, 12- Month Percentage Change 1914-2025
Source: US Bureau of
Labor Statistics https://www.bls.gov/cpi/data.htm
Chart
I-14 provides the consumer price index excluding food and energy from 1957 to
2025. There is long-term inflation in the US without episodes of persistent
deflation.
Chart I-14, US, Consumer Price Index
Excluding Food and Energy, NSA, 1957-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
Chart
I-15 provides 12-month percentage changes of the consumer price index excluding
food and energy from 1958 to 2025. There are three waves of inflation in the
1970s during the Great Inflation. There is no episode of deflation. There is
renewed inflation currently.
Chart I-15, US, Consumer Price Index
Excluding Food and Energy, 12-Month Percentage Change, NSA, 1958-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
ID
Current US Inflation. Consumer price inflation has fluctuated in recent
months. Table I-3 provides 12-month consumer price inflation in Dec 2025 and
Annual Equivalent percentage changes for the month Nov 2025 to Dec 2025 of the
CPI, the core CPI and major segments. There are more complete monthly data for
gasoline such that this item is the only one that shows annual equivalent
inflation for Oct to Dec 2025. The final column provides inflation from Nov
2025 to Dec 2025. CPI prices increased 2.7 percent in the 12 months ending in Dec
2025. The Annual Equivalent rate in Dec 2025 was 3.7 percent in the episode of
shifting energy sources; and the monthly inflation rate of 0.3 percent
annualizes at 3.7 percent. Energy Services Prices increased 7.7 Percent in 12 Months
ending in Dec 2025, Increased at Annual Equivalent 12.7 Percent in Nov 2025-Dec
2025 and increased 1.0 Percent in Dec 2025 or 12.7 percent Annual Equivalent.
Consumer at Home Food Prices increased 2.4 Percent in 12 Months Ending in Dec
2025 and increased at Annual Equivalent 8.7 Percent in Dec 2025 and increased
0.7 Percent in Dec 2025 that annualizes at 8.7 Percent. Prior
inflation rates fluctuate in accordance with inducement of risk appetite or
frustration by risk aversion of carry trades from zero interest rates to
commodity futures. At the margin, the decline in commodity prices in sharp
recent risk aversion in commodities markets caused lower inflation worldwide
(with return in some countries in Dec 2012 and Jan-Feb 2013) that followed a
jump in Aug-Sep 2012 because of the relaxed risk aversion resulting from the
bond-buying program of the European Central Bank or Outright Monetary
Transactions (OMT) (https://www.ecb.europa.eu/press/pr/date/2012/html/pr120906_1.en.html).
Carry trades moved away from commodities into stocks with resulting weaker
commodity prices and stronger equity valuations. There is reversal of exposures
in commodities but with preferences of equities by investors. Geopolitical
events in Eastern Europe and the Middle East together with economic conditions
worldwide are inducing risk concerns in commodities at the margin magnified by
policies shifting energy sources. With zero or very low interest rates,
commodity prices would increase again in an environment of risk appetite, as
shown in past oscillating inflation. Excluding food and energy, core CPI
inflation was 2.6 percent in the 12 months ending in Dec 2025, 2.4 percent in
Annual Equivalent from Nov to Dec 2025 and 0.2 percent in Dec 2025, which
annualizes at 2.4 percent. There is no deflation in the US economy that could
justify further unconventional monetary policy open-ended or forever with very
low interest rates and cessation of bond-buying by the central bank but with
reinvestment of interest and principal, or QE→∞ even
if the economy grows back to potential. The FOMC engaged in increases in the
Fed balance sheet. Financial repression of very low interest rates constituted
protracted distortion of resource allocation by clouding risk/return decisions,
preventing the economy from expanding along its optimal growth path. On Aug 22, 2025, the Federal Open
Market Committee changed its Longer-Run Goals and Monetary Policy Strategy,
including the following (https://www.federalreserve.gov/monetarypolicy/monetary-policy-strategy-tools-and-communications-statement-on-longer-run-goals-monetary-policy-strategy-2025.htm): “Durably
achieving maximum employment fosters broad-based economic opportunities and
benefits for all Americans. The Committee views maximum employment as the
highest level of employment that can be achieved on a sustained basis in a
context of price stability. The maximum level of employment is not directly
measurable and changes over time owing largely to nonmonetary factors that
affect the structure and dynamics of the labor market. Consequently, it would
not be appropriate to specify a fixed goal for employment; rather, the
Committee's policy decisions must be informed by assessments of the maximum
level of employment, recognizing that such assessments are necessarily
uncertain and subject to revision. The Committee considers a wide range of
indicators in making these assessments.
Price
stability is essential for a sound and stable economy and supports the
well-being of all Americans. The inflation rate over the longer run is
primarily determined by monetary policy, and hence the Committee can specify a
longer-run goal for inflation. The Committee reaffirms its judgment that
inflation at the rate of 2 percent, as measured by the annual change in the
price index for personal consumption expenditures, is most consistent over the
longer run with the Federal Reserve's statutory maximum employment and price
stability mandates. The Committee judges that longer-term inflation
expectations that are well anchored at 2 percent foster price stability and
moderate long-term interest rates and enhance the Committee's ability to
promote maximum employment in the face of significant economic disturbances.
The Committee is prepared to act forcefully to ensure that longer-term
inflation expectations remain well anchored.
” emphasis added).
The statement of the
FOMC at the conclusion of its meeting on Dec 12, 2012, revealed policy
intentions (http://www.federalreserve.gov/newsevents/press/monetary/20121212a.htm). The FOMC updated in
the statement at its meeting on Dec 16, 2015 with maintenance of the current
level of the balance sheet and liftoff of interest rates (http://www.federalreserve.gov/newsevents/press/monetary/20151216a.htm) followed by the
statement of Dec 18, 2024 (https://www.federalreserve.gov/newsevents/pressreleases/monetary20241218a.htm):
“December 18, 2024
Federal Reserve issues
FOMC statement
For release at 2:00 p.m. EST
Recent indicators suggest that economic activity has
continued to expand at a solid pace. Since earlier in the year, labor market
conditions have generally eased, and the unemployment rate has moved up but
remains low. Inflation has made progress toward the Committee's 2 percent
objective but remains somewhat elevated.
The Committee seeks to achieve maximum employment and
inflation at the rate of 2 percent over the longer run. The Committee judges
that the risks to achieving its employment and inflation goals are roughly in
balance. The economic outlook is uncertain, and the Committee is attentive to
the risks to both sides of its dual mandate.
In support of its goals, the Committee decided to lower
the target range for the federal funds rate by 1/4 percentage point to 4-1/4 to
4-1/2 percent. In considering the extent and timing of additional adjustments
to the target range for the federal funds rate, the Committee will carefully
assess incoming data, the evolving outlook, and the balance of risks. The
Committee will continue reducing its holdings of Treasury securities and agency
debt and agency mortgage‑backed securities. The Committee is strongly committed
to supporting maximum employment and returning inflation to its 2 percent
objective.
In assessing the appropriate stance of monetary policy,
the Committee will continue to monitor the implications of incoming information
for the economic outlook. The Committee would be prepared to adjust the stance
of monetary policy as appropriate if risks emerge that could impede the
attainment of the Committee's goals. The Committee's assessments will take into
account a wide range of information, including readings on labor market
conditions, inflation pressures and inflation expectations, and financial and
international developments.
Voting for the monetary policy action were Jerome H.
Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Michael S. Barr;
Raphael W. Bostic; Michelle W. Bowman; Lisa D. Cook; Mary C. Daly; Philip N.
Jefferson; Adriana D. Kugler; and Christopher J. Waller. Voting against the
action was Beth M. Hammack, who preferred to maintain the target range for the
federal funds rate at 4-1/2 to 4-3/4 percent.
For media inquiries, please email media@frb.gov or call
202-452-2955.
Implementation Note
issued December 18, 2024
Last Update: December 18, 2024.” Emphasis added.
Tobin (1969) provides
more elegant, complete analysis of portfolio allocation in a general
equilibrium model. The major point is equally clear in a portfolio consisting
of only cash balances and a perpetuity or consol. Let g be the capital
gain, r the rate of interest on the consol and re the
expected rate of interest. The rates are expressed as proportions. The price of
the consol is the inverse of the interest rate, (1+re). Thus,
g = [(r/re) – 1]. The critical analysis of
Tobin is that at extremely low interest rates there is only expectation of
interest rate increases, that is, dre>0, such that there
is expectation of capital losses on the consol, dg<0. Investors move
into positions combining only cash and no consols. Valuations of risk
financial assets would collapse in reversal of long positions in carry trades
with short exposures in a flight to cash. There is no exit from a central bank
created liquidity trap without risks of financial crash and another global recession.
The net worth of the economy depends on interest rates. In theory, “income is
generally defined as the amount a consumer unit could consume (or believe that
it could) while maintaining its wealth intact” (Friedman 1957, 10). Income, Y,
is a flow that is obtained by applying a rate of return, r, to a stock
of wealth, W, or Y = rW (Friedman 1957). According to a
subsequent statement: “The basic idea is simply that individuals live for many
years and that therefore the appropriate constraint for consumption is the
long-run expected yield from wealth r*W. This yield was named
permanent income: Y* = r*W” (Darby 1974, 229), where *
denotes permanent. The simplified relation of income and wealth can be restated
as:
W = Y/r (1)
Equation (1) shows that as r goes to zero, r→0,
W grows without bound, W→∞. Unconventional monetary policy lowers
interest rates to increase the present value of cash flows derived from
projects of firms, creating the impression of long-term increase in net worth.
An attempt to reverse unconventional monetary policy necessarily causes
increases in interest rates, creating the opposite perception of declining net
worth. As r→∞, W = Y/r →0. There is no exit from
unconventional monetary policy without increasing interest rates with resulting
pain of financial crisis and adverse effects on production, investment and
employment.
Table I-3, US, Consumer
Price Index Percentage Changes 12 months NSA and Annual Equivalent ∆%
|
|
% RI Nov 2025 |
∆% 12 Month Dec
2025/Dec |
∆% Annual Equivalent
Oct 2025 to Dec 2025 SA* |
∆% Dec 2025/Nov 2025
SA |
|
CPI All Items |
100.000 |
2.7 |
3.7 |
0.3 |
|
CPI ex Food and Energy |
80.028 |
2.6 |
2.4 |
0.2 |
|
Food at Home |
7.973 |
2.4 |
8.7 |
0.7 |
|
Energy |
6.315 |
2.3 |
3.7 |
0.3 |
|
Gasoline* |
2.883 |
-3.4 |
1.3 |
-0.5 |
|
Energy Services |
3.210 |
7.7 |
12.7 |
1.0 |
|
Electricity |
2.432 |
6.7 |
-1.2 |
-0.1 |
|
Utility Gas |
0.777 |
10.8 |
67.7 |
4.4 |
|
Shelter |
35.514 |
3.2 |
4.9 |
0.4 |
|
Medical Care Services |
6.779 |
3.5 |
4.9 |
0.4 |
|
Transportation
Services |
6.265 |
1.5 |
6.2 |
0.5 |
% RI: Percent Relative
Importance [Not updated because of shutdown.]
*Gasoline data available
for Oct, Nov, Dec 2025.For other items data are only available for Dec 2025.
Source: US Bureau of
Labor Statistics https://www.bls.gov/cpi/
Table I-4 provides relative important components of the
consumer price index. The relative important weights for Jul 2025 are in Table
I-3.
Table I-4, US, Relative
Importance, 2009-2010 Weights, of Components in the Consumer Price Index, US
City Average, Dec 2012
|
All
Items |
100.000 |
|
Food
and Beverages |
15.261 |
|
Food |
14.312 |
|
Food at home |
8.898 |
|
Food away from
home |
5.713 |
|
Housing |
41.021 |
|
Shelter |
31.681 |
|
Rent of primary
residence |
6.545 |
|
Owners’
equivalent rent |
22.622 |
|
Apparel |
3.564 |
|
Transportation |
16.846 |
|
Private
Transportation |
15.657 |
|
New vehicles |
3.189 |
|
Used cars and
trucks |
1.844 |
|
Motor fuel |
5.462 |
|
Gasoline |
5.274 |
|
Medical
Care |
7.163 |
|
Medical care
commodities |
1.714 |
|
Medical care
services |
5.448 |
|
Recreation |
5.990 |
|
Education
and Communication |
6.779 |
|
Other
Goods and Services |
3.376 |
Refers to all urban
consumers, covering approximately 87 percent of the US population (see http://www.bls.gov/cpi/cpiovrvw.htm#item1). Source: US Bureau of
Labor Statistics http://www.bls.gov/cpi/cpiri2011.pdf http://www.bls.gov/cpi/cpiriar.htm http://www.bls.gov/cpi/cpiri2012.pdf
Chart
I-18 provides the US consumer price index for housing from 2001 to 2025.
Housing prices rose sharply during the decade until the bump of the global
recession and increased again in 2011-2012 with some stabilization in 2013.
There is renewed increase in 2014 followed by stabilization and renewed
increase in 2015-2025. The CPI excluding housing could show much higher
inflation. The commodity carry trades resulting from unconventional monetary
policy have compressed income remaining after paying for indispensable shelter.
Housing prices increased recently.
Chart
I-18, US, Consumer Price Index, Housing, NSA, 2001-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
Chart I-19 provides 12-month percentage changes of the
housing CPI. Percentage changes collapsed during the global recession but have
been rising into positive territory in 2011 and 2012-2013 but with the rate
declining then increasing into 2014. There is decrease into 2015 followed by
stability and marginal increase in 2016-2019 followed by initial decline in the
global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions),
in the lockdown of
economic activity in the COVID-19 event and then trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) with sharp recovery.
Chart I-19, US, Consumer Price Index,
Housing, 12-Month Percentage Change, NSA, 2001-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
There have been waves of consumer price inflation in the US
in 2011 and into 2025 (https://cmpassocregulationblog.blogspot.com/2022/03/accelerating-inflation-throughout-world.html and earlier https://cmpassocregulationblog.blogspot.com/2022/02/us-gdp-growing-at-saar-of-70-percent-in.html) that are illustrated in Table I-5.
The first wave occurred in Jan-Apr 2011 and was caused by the carry
trade of commodity prices induced by unconventional monetary policy of zero
interest rates. Cheap money at zero opportunity cost in environment of risk
appetite was channeled into financial risk assets, causing increases in
commodity prices. The annual equivalent rate of increase of the all-items CPI
in Jan-Apr 2011 was 4.9 percent and the CPI excluding food and energy increased
at annual equivalent rate of 1.8 percent. The second wave occurred
during the collapse of the carry trade from zero interest rates to exposures in
commodity futures because of risk aversion in financial markets created by the
sovereign debt crisis in Europe. The annual equivalent rate of increase of the
all-items CPI dropped to 1.8 percent in May-Jun 2011 while the annual
equivalent rate of the CPI excluding food and energy increased at 2.4 percent.
In the third wave in Jul-Sep 2011, annual equivalent CPI inflation rose
to 3.2 percent while the core CPI increased at 2.4 percent. The fourth wave
occurred in the form of increase of the CPI all-items annual equivalent rate to
1.8 percent in Oct-Nov 2011 with the annual equivalent rate of the CPI
excluding food and energy remaining at 2.4 percent. The fifth wave
occurred in Dec 2011 to Jan 2012 with annual equivalent headline inflation of
1.8 percent and core inflation of 2.4 percent. In the sixth wave,
headline CPI inflation increased at annual equivalent 2.4 percent in Feb-Apr
2012 and 2.0 percent for the core CPI. The seventh wave in May-Jul
occurred with annual equivalent inflation of minus 1.2 percent for the headline
CPI in May-Jul 2012 and 2.0 percent for the core CPI. The eighth wave is
with annual equivalent inflation of 6.8 percent in Aug-Sep 2012 but 5.7 percent
including Oct and 2.0 percent for the core CPI. In the ninth wave,
annual equivalent inflation in Nov 2012 was minus 2.4 percent under the new
shock of risk aversion and 0.0 percent in Dec 2012 with annual equivalent of 0.0
percent in Nov 2012-Jan 2013 and 2.0 percent for the core CPI. In the tenth
wave, annual equivalent of the headline CPI was 6.2 percent in Feb 2013 and
1.2 percent for the core CPI. In the eleventh wave, annual equivalent
inflation was minus 3.0 percent in Mar-Apr 2013 and 0.6 percent for the core
index. In the twelfth wave, annual equivalent inflation was 1.4 percent
in May-Sep 2013 and 2.2 percent for the core CPI. In the thirteenth wave,
annual equivalent CPI inflation in Oct-Nov 2013 was 1.8 percent and 1.8 percent
for the core CPI. Inflation returned in the fourteenth wave at 2.4
percent for the headline CPI index and 1.8 percent for the core CPI in annual
equivalent for Dec 2013 to Mar 2014. In the fifteenth wave, inflation
moved to annual equivalent 1.8 percent for the headline index in Apr-Jul 2014
and 2.1 percent for the core index. In the sixteenth wave, annual
equivalent inflation was 0.0 percent in Aug 2014 and 1.2 percent for the core
index. In the seventeenth wave, annual equivalent inflation was 0.0
percent for the headline CPI and 2.4 percent for the core in Sep-Oct 2014. In
the eighteenth wave, annual equivalent inflation was minus 4.3 percent
for the headline index in Nov 2014-Jan 2015 and 1.2 percent for the core. In
the nineteenth wave, annual equivalent inflation was 3.2 percent for the
headline index and 2.2 percent for the core index in Feb-Jun 2015. In the twentieth
wave, annual equivalent inflation was at 2.4 percent in Jul 2015 for the
headline and core indexes. In the twenty-first wave, headline consumer
prices decreased at 1.2 percent in annual equivalent in Aug-Sep 2015 while core
prices increased at annual equivalent 1.8 percent. In the twenty-second wave,
consumer prices increased at annual equivalent 1.2 percent for the central
index and 2.4 percent for the core in Oct-Nov 2015. In the twenty-third wave,
annual equivalent inflation was minus 0.6 percent for the headline CPI in Dec
2015 to Jan 2016 and 1.8 percent for the core. In the twenty-fourth wave,
annual equivalent was minus 1.2 percent and 2.4 percent for the core in Feb
2016. In the twenty-fifth wave, annual equivalent inflation was at 4.3
percent for the central index in Mar-Apr 2016 and at 3.0 percent for the core
index. In the twenty-sixth wave, annual equivalent inflation was 3.0
percent for the central CPI in May-Jun 2016 and 2.4 percent for the core CPI.
In the twenty-seventh wave, annual equivalent inflation was minus 1.2
percent for the central CPI and 1.2 percent for the core in Jul 2016. In the twenty-eighth
wave, annual equivalent inflation was 2.4 percent for the headline CPI in
Aug 2016 and 2.4 percent for the core. In the twenty-ninth wave, CPI
prices increased at annual equivalent 3.0 percent in Sep-Oct 2016 while the
core CPI increased at 1.8 percent. In the thirtieth wave, annual
equivalent CPI prices increased at 2.4 percent in Nov-Dec 2016 while the core
CPI increased at 1.8 percent. In the thirty-first wave, CPI prices
increased at annual equivalent 4.9 percent in Jan 2017 while the core index
increased at 2.4 percent. In the thirty-second wave, CPI prices changed
at annual equivalent 2.4 percent in Feb 2017 while the core increased at 2.4
percent. In the thirty-third wave, CPI prices changed at annual
equivalent 0.0 percent in Mar 2017 while the core index changed at 0.0 percent.
In the thirty-fourth wave, CPI prices increased at 1.2 percent annual
equivalent in Apr 2017 while the core index increased at 1.2 percent. In the thirty-fifth
wave, CPI prices changed at 0.0 annual equivalent in May-Jun 2017 while
core prices increased at 1.2 percent. In the thirty-sixth wave, CPI
prices changed at annual equivalent 0.0 percent in Jul 2017 while core prices
increased at 1.2 percent. In the thirty-seventh wave, CPI prices
increased at annual equivalent 5.5 percent in Aug-Sep 2017 while core prices
increased at 1.8 percent. In the thirty-eighth wave, CPI prices
increased at 2.4 percent annual equivalent in Oct-Nov 2017 while core prices
increased at 2.4 percent. In the thirty-ninth wave, CPI prices increased
at 3.7 percent annual equivalent in Dec 2017-Feb 2018 while core prices
increased at 2.8 percent. In the fortieth wave, CPI prices changed at
0.0 percent annual equivalent in Mar 2018 while core prices increased at 2.4
percent. In the forty-first wave, CPI prices increased at 3.0 percent
annual equivalent in Apr-May 2018 while core prices increased at 1.8 percent.
In the forty-second wave, CPI prices increased at 1.8 percent in Jun-Sep
2018 while core prices increased at 1.5 percent. In the forty-third wave,
CPI prices increased at annual equivalent 2.4 percent in Oct 2018 while core
prices increased at 2.4 percent. In the forty-fourth wave, CPI prices
decreased at 0.4 percent annual equivalent in Nov 2018-Jan 2019 while core
prices increased at 2.8 percent. In the forty-fifth wave, CPI prices
increased at 4.5 percent annual equivalent in Feb-Apr 2019 while core prices
increased at 2.0 percent. In the forty-sixth wave, CPI prices changed at
0.0 percent annual equivalent in May-Jun 2019 while core prices increased at
1.8 percent. In the forty-seventh wave, CPI prices increased at 2.4
percent annual equivalent in Jul 2019 while core prices increased at 2.4
percent. In the forty-eighth wave, CPI prices increased at 1.8 percent
annual equivalent in Aug-Sep 2019 while core prices increased at 2.4 percent.
In the forty-ninth wave, CPI prices increased at 3.7 percent annual
equivalent in Oct-Dec 2019 while core prices increased at 2.4 percent. In the fiftieth
wave, CPI prices increased at 1.2 percent annual equivalent in Jan-Feb 2020
and core prices at 3.0 percent. In the fifty-first wave, CPI prices
decreased at annual equivalent 5.5 percent in Mar-May 2020 while core prices
decreased at 2.8 percent. In the fifty-second wave, CPI prices increased
at 6.2 percent annual equivalent in Jun-Jul 2020 and core prices increased at
4.9 percent. In the fifty-third wave, CPI prices increased at annual
equivalent 4.3 percent and core prices increased at 3.7 percent in Aug-Sep
2020. In the fifty-fourth wave, CPI prices increased at 1.2 percent
annual equivalent and core prices at 1.2 percent in Oct 2020. In the fifty-fifth
wave, CPI prices increased at 3.2 percent annual equivalent in Nov 2020-Jan
2021 and core prices at 1.6 percent. In the fifty-sixth wave, CPI prices
increased at annual equivalent 5.5 percent in Feb-Mar 2021 and core prices at
2.4 percent. In the fifty-seventh wave, CPI prices increased at annual
equivalent 9.6 percent in Apr-Jun 2021 and core prices at 9.6 percent. In the fifty-eighth
wave, CPI prices increased at annual equivalent 4.9 percent in Jul-Sep 2021
and core prices at 3.2 percent. In the fifty-ninth wave, CPI prices
increased at annual equivalent 10.7 percent in Oct-Nov 2021 while core prices
increased at 8.1 percent. In the sixtieth wave, CPI prices increased at
annual equivalent 8.3 percent and core prices increased at 7.0 percent in Dec
2021-Feb 2022. In the sixty-first wave, CPI prices increased at annual
equivalent 12.7 percent and core prices at 3.7 percent in Mar 2022. In the sixty-second
wave, CPI prices increased at annual equivalent 4.9 percent in Apr 2022 and
core prices at 6.2 percent. In the sixty-third wave, CPI prices
increased at annual equivalent 14.0 percent in May-Jun 2022 and core prices at
7.4 percent. In the sixty-fourth wave, CPI prices changed at annual
equivalent 0.0 percent in Jul 2022 and core prices increased at 4.9 percent
annual equivalent. In the sixty-fifth wave, CPI prices increased at
annual equivalent 1.2 percent in Aug 2022 and core prices at 6.2 percent annual
equivalent. In the sixty-sixth wave, CPI prices increased at annual
equivalent 5.5 percent in Sep-Oct 2022 and core prices at 6.2 percent. In the sixty-seventh
wave, CPI prices increased at annual equivalent 2.4 percent in Nov 2022 and
core prices at 3.7 percent. In the sixty-eighth wave, CPI prices changed
at annual equivalent 0.0 percent while core prices increased at 4.9 percent in
Dec 2022. In the sixty-ninth wave, CPI prices increased at 5.5 percent
annual equivalent in Jan-Feb 2023 and core prices at 5.5 percent. In the seventieth
wave, CPI prices increased at annual equivalent 1.2 percent and core prices
at 3.7 percent in Mar 2023. In the seventy-first wave, CPI prices
increased at annual equivalent 4.9 percent in Apr 2023 while core prices
increased at 4.9 percent. In the seventy-second wave, CPI prices
increased at 2.4 percent annual equivalent in May 2023 while core prices
increased at 4.9 percent. In the seventy-third wave, CPI prices
increased at 3.0 percent annual equivalent in Jun-Jul 2023 while core prices
increased at 2.4 percent. In the seventy-fourth wave, CPI prices
increased at annual equivalent 6.2 percent in Aug 2023 while core prices
increased at 2.4 percent. In the seventy-fifth wave, CPI prices
increased at annual equivalent 4.9 percent in Sep 2023 while core prices
increased at 3.7 percent. In the seventy-sixth wave, CPI prices
increased at 1.2 percent annual equivalent in Oct-Nov 2023 while core prices
increased at 3.7 percent. In the seventy-eighth wave, CPI prices
increased at 2.4 percent annual equivalent in Dec 2023 while core prices
increased at 3.7 percent. In the seventy-ninth wave, CPI prices
increased at 4.1 percent annual equivalent in Jan-Mar 2024 while core prices
increased at 4.9 percent. In the eightieth wave, CPI prices increased at
3.7 percent annual equivalent in Apr 2024 while core prices increased at 3.7
percent. In the eighty-first wave,
CPI prices changed at 0.0 percent annual equivalent in May 2024 while core
prices increased at 1.2 percent. In the eighty-second wave, CPI prices
changed at 0.0 percent annual equivalent in Jun 2024 while core prices
increased at 1.2 percent. In the eighty-third wave, CPI prices increased
at 2.1 percent annual equivalent in Jul-Oct 2024 while core prices increased at
3.4 percent. In the eighty-ninth wave, CPI prices increased at 4.3
percent annual equivalent in Nov-Dec 2024 while core prices increased at 3.0
percent. In the nineteenth wave, CPI prices increased at 6.2 percent
annual equivalent in Jan 2025 while core prices increased at 4.9 percent. In
the twentieth wave, CPI prices increased at 2.4 percent annual
equivalent in Feb 2025 while core prices increased at 2.4 percent. In the twenty-first
wave, CPI prices decreased at 1.2 percent annual equivalent in Mar 2025
while core prices increased at 1.2 percent. In the twenty-second wave,
CPI prices increased at 1.8 percent annual equivalent in Apr-May 2025 while
core prices increased at 1.8 percent. In the twenty-third wave, CPI
prices increased at 3.0 percent annual equivalent in Jun-Jul 2025 while core
prices increased at 3.0 percent. In the twenty-fourth
wave, CPI prices increased at 4.3 percent annual equivalent in Aug-Sep 2025
while core prices increased at 3.0 percent. There are no observations for Oct
2025 and Nov 2025 during the appropriations shutdown. The only available
observations for Nov 2025 are increase of 2.7 percent in Nov 2025 in the
all-items index relative to a year earlier and 2.6 percent in the core index. In
the twenty-fifth wave, consumer prices increased at 3.7 percent annual
equivalent in Dec 2025 while core prices increased at 2.4 percent. The
conclusion is that inflation accelerates and decelerates in unpredictable
fashion because of shocks or risk aversion and portfolio reallocations in carry
trades from zero interest rates to commodity derivatives. There are recent
increases in shifting sources of energy.
Table I-5, US, Headline
and Core CPI Inflation Monthly SA and 12 Months NSA ∆%
|
|
All Items SA Month |
All Items NSA 12 month |
Core SA |
Core NSA |
|
Dec 2025 |
0.3 |
2.7 |
0.2 |
2.6 |
|
AE Dec 2025 |
3.7 |
|
2.4 |
|
|
Nov |
NA |
2.7 |
NA |
2.6 |
|
Oct |
NA |
NA |
NA |
NA |
|
Sep |
0.3 |
3.0 |
0.2 |
3.0 |
|
Aug |
0.4 |
2.9 |
0.3 |
3.1 |
|
AE
Aug-Sep 2025 |
4.3 |
|
3.0 |
|
|
Jul |
0.2 |
2.7 |
0.3 |
3.1 |
|
Jun |
0.3 |
2.7 |
0.2 |
2.9 |
|
AE
Jun-Jul 2025 |
3.0 |
|
3.0 |
|
|
May |
0.1 |
2.4 |
0.1 |
2.8 |
|
Apr |
0.2 |
2.3 |
0.2 |
2.8 |
|
AE
Apr-May 2025 |
1.8 |
|
1.8 |
|
|
Mar |
-0.1 |
2.4 |
0.1 |
2.8 |
|
AE
Mar 2025 |
-1.2 |
|
1.2 |
|
|
Feb |
0.2 |
2.8 |
0.2 |
3.1 |
|
AE
Feb 2025 |
2.4 |
|
2.4 |
|
|
Jan |
0.5 |
3.0 |
0.4 |
3.3 |
|
AE
Jan 2025 |
6.2 |
|
4.9 |
|
|
Dec |
0.4 |
2.9 |
0.2 |
3.2 |
|
Nov |
0.3 |
2.7 |
0.3 |
3.3 |
|
AE
Nov-Dec 2024 |
4.3 |
|
3.0 |
|
|
Oct |
0.2 |
2.6 |
0.3 |
3.3 |
|
Sep |
0.2 |
2.4 |
0.3 |
3.3 |
|
Aug |
0.2 |
2.5 |
0.3 |
3.2 |
|
Jul |
0.1 |
2.9 |
0.2 |
3.2 |
|
AE
Jul-Oct 2024 |
2.1 |
|
3.4 |
|
|
Jun |
0.0 |
3.0 |
0.1 |
3.3 |
|
AE
Jun 2024 |
0.0 |
|
1.2 |
|
|
May |
0.0 |
3.3 |
0.1 |
3.4 |
|
AE
May 2024 |
0.0 |
|
1.2 |
|
|
Apr |
0.3 |
3.4 |
0.3 |
3.6 |
|
AE
Apr 2024 |
3.7 |
|
3.7 |
|
|
Mar |
0.3 |
3.5 |
0.4 |
3.8 |
|
Feb |
0.4 |
3.2 |
0.4 |
3.8 |
|
Jan |
0.3 |
3.1 |
0.4 |
3.9 |
|
AE
Jan-Mar 2024 |
4.1 |
|
4.9 |
|
|
Dec 2023 |
0.2 |
3.4 |
0.3 |
3.9 |
|
AE
Dec 2023 |
2.4 |
|
3.7 |
|
|
Nov |
0.1 |
3.1 |
0.3 |
4.0 |
|
Oct |
0.1 |
3.2 |
0.3 |
4.0 |
|
AE
Oct-Nov |
1.2 |
|
3.7 |
|
|
Sep |
0.4 |
3.7 |
0.3 |
4.1 |
|
AE
Sep |
4.9 |
|
3.7 |
|
|
Aug |
0.5 |
3.7 |
0.2 |
4.3 |
|
AE
Aug |
6.2 |
|
2.4 |
|
|
Jul |
0.2 |
3.2 |
0.2 |
4.7 |
|
Jun |
0.3 |
3.0 |
0.2 |
4.8 |
|
AE
Jun-Jul |
3.0 |
|
2.4 |
|
|
May |
0.2 |
4.0 |
0.4 |
5.3 |
|
AE
May |
2.4 |
|
4.9 |
|
|
Apr |
0.4 |
4.9 |
0.4 |
5.5 |
|
AE
Apr |
4.9 |
|
4.9 |
|
|
Mar |
0.1 |
5.0 |
0.3 |
5.6 |
|
AE
Mar |
1.2 |
|
3.7 |
|
|
Feb |
0.3 |
6.0 |
0.5 |
5.5 |
|
Jan |
0.6 |
6.4 |
0.4 |
5.6 |
|
AE
Jan-Feb |
5.5 |
|
5.5 |
|
|
Dec 2022 |
0.0 |
6.5 |
0.4 |
5.7 |
|
AE
Dec |
0.0 |
|
4.9 |
|
|
Nov |
0.2 |
7.1 |
0.3 |
6.0 |
|
AE
Nov |
2.4 |
|
3.7 |
|
|
Oct |
0.5 |
7.7 |
0.4 |
6.3 |
|
Sep |
0.4 |
8.2 |
0.6 |
6.6 |
|
AE
Sep-Oct |
5.5 |
|
6.2 |
|
|
Aug |
0.1 |
8.3 |
0.5 |
6.3 |
|
AE
Aug |
1.2 |
|
6.2 |
|
|
Jul |
0.0 |
8.5 |
0.4 |
5.9 |
|
AE
Jul |
0.0 |
|
4.9 |
|
|
Jun |
1.3 |
9.1 |
0.7 |
5.9 |
|
May |
0.9 |
8.6 |
0.5 |
6.0 |
|
AE
May-Jun |
14.0 |
|
7.4 |
|
|
Apr |
0.4 |
8.3 |
0.5 |
6.2 |
|
AE
Apr |
4.9 |
|
6.2 |
|
|
Mar |
1.0 |
8.5 |
0.3 |
6.5 |
|
AE
Mar |
12.7 |
|
3.7 |
|
|
Feb |
0.7 |
7.9 |
0.5 |
6.4 |
|
Jan |
0.6 |
7.5 |
0.6 |
6.0 |
|
Dec 2021 |
0.7 |
7.0 |
0.6 |
5.5 |
|
AE
Dec-Feb |
8.3 |
|
7.0 |
|
|
Nov |
0.8 |
6.8 |
0.6 |
4.9 |
|
Oct |
0.9 |
6.2 |
0.7 |
4.6 |
|
AE
Oct-Nov |
10.7 |
|
8.1 |
|
|
Sep |
0.4 |
5.4 |
0.3 |
4.0 |
|
Aug |
0.3 |
5.3 |
0.1 |
4.0 |
|
Jul |
0.5 |
5.4 |
0.4 |
4.3 |
|
AE
Jul-Sep |
4.9 |
|
3.2 |
|
|
Jun |
0.9 |
5.4 |
0.8 |
4.5 |
|
May |
0.7 |
5.0 |
0.7 |
3.8 |
|
Apr |
0.7 |
4.2 |
0.8 |
3.0 |
|
AE
Apr-Jun |
9.6 |
|
9.6 |
|
|
Mar |
0.5 |
2.6 |
0.3 |
1.6 |
|
Feb |
0.4 |
1.7 |
0.1 |
1.3 |
|
AE
∆% Feb-Mar |
5.5 |
|
2.4 |
|
|
Jan |
0.2 |
1.4 |
0.0 |
1.4 |
|
Dec 2020 |
0.4 |
1.4 |
0.1 |
1.6 |
|
Nov |
0.2 |
1.2 |
0.3 |
1.6 |
|
AE
∆% Nov-Jan |
3.2 |
|
1.6 |
|
|
Oct |
0.1 |
1.2 |
0.1 |
1.6 |
|
AE
∆% Oct |
1.2 |
|
1.2 |
|
|
Sep |
0.3 |
1.4 |
0.2 |
1.7 |
|
Aug |
0.4 |
1.3 |
0.4 |
1.7 |
|
AE
∆% Aug-Sep |
4.3 |
|
3.7 |
|
|
Jul |
0.5 |
1.0 |
0.6 |
1.6 |
|
Jun |
0.5 |
0.6 |
0.2 |
1.2 |
|
AE
∆% Jun-Jul |
6.2 |
|
4.9 |
|
|
May |
-0.1 |
0.1 |
-0.1 |
1.2 |
|
Apr |
-0.8 |
0.3 |
-0.5 |
1.4 |
|
Mar |
-0.5 |
1.5 |
-0.1 |
2.1 |
|
AE
∆% Mar-May |
-5.5 |
|
-2.8 |
|
|
Feb |
0.0 |
2.3 |
0.2 |
2.4 |
|
Jan |
0.2 |
2.5 |
0.3 |
2.3 |
|
AE
∆% Jan-Feb |
1.2 |
|
3.0 |
|
|
Dec 2019 |
0.3 |
2.3 |
0.2 |
2.3 |
|
Nov |
0.3 |
2.1 |
0.2 |
2.3 |
|
Oct |
0.3 |
1.8 |
0.2 |
2.3 |
|
AE
∆% Oct-Dec |
3.7 |
|
2.4 |
|
|
Sep |
0.2 |
1.7 |
0.2 |
2.4 |
|
Aug |
0.1 |
1.7 |
0.2 |
2.4 |
|
AE
∆% Aug-Sep |
1.8 |
|
2.4 |
|
|
Jul |
0.2 |
1.8 |
0.2 |
2.2 |
|
AE
∆% Jul |
2.4 |
|
2.4 |
|
|
Jun |
0.0 |
1.6 |
0.2 |
2.1 |
|
May |
0.0 |
1.8 |
0.1 |
2.0 |
|
AE
∆% May-Jun |
0.0 |
|
1.8 |
|
|
Apr |
0.4 |
2.0 |
0.2 |
2.1 |
|
Mar |
0.4 |
1.9 |
0.1 |
2.0 |
|
Feb |
0.3 |
1.5 |
0.2 |
2.1 |
|
AE
∆% Feb-Apr |
4.5 |
|
2.0 |
|
|
Jan |
-0.1 |
1.6 |
0.3 |
2.2 |
|
Dec 2018 |
0.1 |
1.9 |
0.2 |
2.2 |
|
Nov |
-0.1 |
2.2 |
0.2 |
2.2 |
|
AE
∆% Nov-Jan |
-0.4 |
|
2.8 |
|
|
Oct |
0.2 |
2.5 |
0.2 |
2.1 |
|
AE
∆% Oct |
2.4 |
|
2.4 |
|
|
Sep |
0.2 |
2.3 |
0.2 |
2.2 |
|
Aug |
0.2 |
2.7 |
0.1 |
2.2 |
|
Jul |
0.1 |
2.9 |
0.1 |
2.4 |
|
Jun |
0.1 |
2.9 |
0.1 |
2.3 |
|
AE
∆% Jun-Sep |
1.8 |
|
1.5 |
|
|
May |
0.2 |
2.8 |
0.2 |
2.2 |
|
Apr |
0.3 |
2.5 |
0.1 |
2.1 |
|
AE
∆% Apr-May |
3.0 |
|
1.8 |
|
|
Mar |
0.0 |
2.4 |
0.2 |
2.1 |
|
AE
∆% Mar |
0.0 |
|
2.4 |
|
|
Feb |
0.3 |
2.2 |
0.2 |
1.8 |
|
Jan |
0.4 |
2.1 |
0.3 |
1.8 |
|
Dec 2017 |
0.2 |
2.1 |
0.2 |
1.8 |
|
AE
∆% Dec-Feb |
3.7 |
|
2.8 |
|
|
Nov |
0.3 |
2.2 |
0.1 |
1.7 |
|
Oct |
0.1 |
2.0 |
0.3 |
1.8 |
|
AE
∆% Oct-Nov |
2.4 |
|
2.4 |
|
|
Sep |
0.5 |
2.2 |
0.1 |
1.7 |
|
Aug |
0.4 |
1.9 |
0.2 |
1.7 |
|
AE
∆% Aug-Sep |
5.5 |
|
1.8 |
|
|
Jul |
0.0 |
1.7 |
0.1 |
1.7 |
|
AE
∆% Jul |
0.0 |
|
1.2 |
|
|
Jun |
0.1 |
1.6 |
0.1 |
1.7 |
|
May |
-0.1 |
1.9 |
0.1 |
1.7 |
|
AE
∆% May-Jun |
0.0 |
|
1.2 |
|
|
Apr |
0.1 |
2.2 |
0.1 |
1.9 |
|
AE
∆% Apr |
1.2 |
|
1.2 |
|
|
Mar |
0.0 |
2.4 |
0.0 |
2.0 |
|
AE
∆% Mar |
0.0 |
|
0.0 |
|
|
Feb |
0.2 |
2.7 |
0.2 |
2.2 |
|
AE
∆% Feb |
2.4 |
|
2.4 |
|
|
Jan |
0.4 |
2.5 |
0.2 |
2.3 |
|
AE
∆% Jan |
4.9 |
|
2.4 |
|
|
Dec 2016 |
0.3 |
2.1 |
0.2 |
2.2 |
|
Nov |
0.1 |
1.7 |
0.1 |
2.1 |
|
AE
∆% Nov-Dec |
2.4 |
|
1.8 |
|
|
Oct |
0.2 |
1.6 |
0.1 |
2.1 |
|
Sep |
0.3 |
1.5 |
0.2 |
2.2 |
|
AE
∆% Sep-Oct |
3.0 |
|
1.8 |
|
|
Aug |
0.2 |
1.1 |
0.2 |
2.3 |
|
AE ∆
Aug |
2.4 |
|
2.4 |
|
|
Jul |
-0.1 |
0.8 |
0.1 |
2.2 |
|
AE
∆% Jul |
-1.2 |
|
1.2 |
|
|
Jun |
0.3 |
1.0 |
0.2 |
2.2 |
|
May |
0.2 |
1.0 |
0.2 |
2.2 |
|
AE
∆% May-Jun |
3.0 |
|
2.4 |
|
|
Apr |
0.4 |
1.1 |
0.3 |
2.1 |
|
Mar |
0.3 |
0.9 |
0.2 |
2.2 |
|
AE
∆% Mar-Apr |
4.3 |
|
3.0 |
|
|
Feb |
-0.1 |
1.0 |
0.2 |
2.3 |
|
AE
∆% Feb |
-1.2 |
|
2.4 |
|
|
Jan |
0.0 |
1.4 |
0.2 |
2.2 |
|
Dec 2015 |
-0.1 |
0.7 |
0.1 |
2.1 |
|
AE
∆% Dec-Jan |
-0.6 |
|
1.8 |
|
|
Nov |
0.1 |
0.5 |
0.2 |
2.0 |
|
Oct |
0.1 |
0.2 |
0.2 |
1.9 |
|
AE
∆% Oct-Nov |
1.2 |
|
2.4 |
|
|
Sep |
-0.2 |
0.0 |
0.2 |
1.9 |
|
Aug |
0.0 |
0.2 |
0.1 |
1.8 |
|
AE
∆% Aug-Sep |
-1.2 |
|
1.8 |
|
|
Jul |
0.2 |
0.2 |
0.2 |
1.8 |
|
AE
∆% Jul |
2.4 |
|
2.4 |
|
|
Jun |
0.3 |
0.1 |
0.2 |
1.8 |
|
May |
0.3 |
0.0 |
0.1 |
1.7 |
|
Apr |
0.1 |
-0.2 |
0.2 |
1.8 |
|
Mar |
0.3 |
-0.1 |
0.2 |
1.8 |
|
Feb |
0.3 |
0.0 |
0.2 |
1.7 |
|
AE
∆% Feb-Jun |
3.2 |
|
2.2 |
|
|
Jan |
-0.6 |
-0.1 |
0.1 |
1.6 |
|
Dec 2014 |
-0.3 |
0.8 |
0.1 |
1.6 |
|
Nov |
-0.2 |
1.3 |
0.1 |
1.7 |
|
AE
∆% Nov-Jan |
-4.3 |
|
1.2 |
|
|
Oct |
0.0 |
1.7 |
0.2 |
1.8 |
|
Sep |
0.0 |
1.7 |
0.2 |
1.7 |
|
AE
∆% Sep-Oct |
0.0 |
|
2.4 |
|
|
Aug |
0.0 |
1.7 |
0.1 |
1.7 |
|
AE
∆% Aug |
0.0 |
|
1.2 |
|
|
Jul |
0.1 |
2.0 |
0.2 |
1.9 |
|
Jun |
0.1 |
2.1 |
0.1 |
1.9 |
|
May |
0.2 |
2.1 |
0.2 |
2.0 |
|
Apr |
0.2 |
2.0 |
0.2 |
1.8 |
|
AE
∆% Apr-Jul |
1.8 |
|
2.1 |
|
|
Mar |
0.2 |
1.5 |
0.2 |
1.7 |
|
Feb |
0.1 |
1.1 |
0.1 |
1.6 |
|
Jan |
0.2 |
1.6 |
0.1 |
1.6 |
|
Dec 2013 |
0.3 |
1.5 |
0.2 |
1.7 |
|
AE
∆% Dec-Mar |
2.4 |
|
1.8 |
|
|
Nov |
0.2 |
1.2 |
0.2 |
1.7 |
|
Oct |
0.1 |
1.0 |
0.1 |
1.7 |
|
AE
∆% Oct-Nov |
1.8 |
|
1.8 |
|
|
Sep |
0.0 |
1.2 |
0.2 |
1.7 |
|
Aug |
0.2 |
1.5 |
0.2 |
1.8 |
|
Jul |
0.2 |
2.0 |
0.2 |
1.7 |
|
Jun |
0.2 |
1.8 |
0.2 |
1.6 |
|
May |
0.0 |
1.4 |
0.1 |
1.7 |
|
AE
∆% May-Sep |
1.4 |
|
2.2 |
|
|
Apr |
-0.2 |
1.1 |
0.0 |
1.7 |
|
Mar |
-0.3 |
1.5 |
0.1 |
1.9 |
|
AE
∆% Mar-Apr |
-3.0 |
|
0.6 |
|
|
Feb |
0.5 |
2.0 |
0.1 |
2.0 |
|
AE
∆% Feb |
6.2 |
|
1.2 |
|
|
Jan |
0.2 |
1.6 |
0.2 |
1.9 |
|
Dec 2012 |
0.0 |
1.7 |
0.2 |
1.9 |
|
Nov |
-0.2 |
1.8 |
0.1 |
1.9 |
|
AE
∆% Nov-Jan |
0.0 |
|
2.0 |
|
|
Oct |
0.3 |
2.2 |
0.2 |
2.0 |
|
Sep |
0.5 |
2.0 |
0.2 |
2.0 |
|
Aug |
0.6 |
1.7 |
0.1 |
1.9 |
|
AE
∆% Aug-Oct |
5.7 |
|
2.0 |
|
|
Jul |
0.0 |
1.4 |
0.2 |
2.1 |
|
Jun |
-0.1 |
1.7 |
0.2 |
2.2 |
|
May |
-0.2 |
1.7 |
0.1 |
2.3 |
|
AE
∆% May-Jul |
-1.2 |
|
2.0 |
|
|
Apr |
0.2 |
2.3 |
0.2 |
2.3 |
|
Mar |
0.2 |
2.7 |
0.2 |
2.3 |
|
Feb |
0.2 |
2.9 |
0.1 |
2.2 |
|
AE
∆% Feb-Apr |
2.4 |
|
2.0 |
|
|
Jan |
0.3 |
2.9 |
0.2 |
2.3 |
|
Dec 2011 |
0.0 |
3.0 |
0.2 |
2.2 |
|
AE
∆% Dec-Jan |
1.8 |
|
2.4 |
|
|
Nov |
0.2 |
3.4 |
0.2 |
2.2 |
|
Oct |
0.1 |
3.5 |
0.2 |
2.1 |
|
AE
∆% Oct-Nov |
1.8 |
|
2.4 |
|
|
Sep |
0.2 |
3.9 |
0.1 |
2.0 |
|
Aug |
0.3 |
3.8 |
0.3 |
2.0 |
|
Jul |
0.3 |
3.6 |
0.2 |
1.8 |
|
AE
∆% Jul-Sep |
3.2 |
|
2.4 |
|
|
Jun |
0.0 |
3.6 |
0.2 |
1.6 |
|
May |
0.3 |
3.6 |
0.2 |
1.5 |
|
AE
∆% May-Jun |
1.8 |
|
2.4 |
|
|
Apr |
0.5 |
3.2 |
0.1 |
1.3 |
|
Mar |
0.5 |
2.7 |
0.1 |
1.2 |
|
Feb |
0.3 |
2.1 |
0.2 |
1.1 |
|
Jan |
0.3 |
1.6 |
0.2 |
1.0 |
|
AE
∆% Jan-Apr |
4.9 |
|
1.8 |
|
|
Dec 2010 |
0.4 |
1.5 |
0.1 |
0.8 |
|
Nov |
0.3 |
1.1 |
0.1 |
0.8 |
|
Oct |
0.3 |
1.2 |
0.1 |
0.6 |
|
Sep |
0.2 |
1.1 |
0.1 |
0.8 |
|
Aug |
0.1 |
1.1 |
0.1 |
0.9 |
|
Jul |
0.2 |
1.2 |
0.1 |
0.9 |
|
Jun |
0.0 |
1.1 |
0.1 |
0.9 |
|
May |
-0.1 |
2.0 |
0.1 |
0.9 |
|
Apr |
0.0 |
2.2 |
0.0 |
0.9 |
|
Mar |
0.0 |
2.3 |
0.0 |
1.1 |
|
Feb |
-0.1 |
2.1 |
0.0 |
1.3 |
|
Jan |
0.1 |
2.6 |
-0.1 |
1.6 |
Note: Core: excluding
food and energy; AE: annual equivalent
Source: US Bureau of
Labor Statistics https://www.bls.gov/cpi/
NA: Not available because of lapse of
appropriations.
Chart
I-18 provides the US consumer price index for housing from 2001 to 2025.
Housing prices rose sharply during the decade until the bump of the global
recession and increased again in 2011-2012 with some stabilization in 2013.
There is renewed increase in 2014 followed by stabilization and renewed
increase in 2015-2025. The CPI excluding housing could show much higher
inflation. The commodity carry trades resulting from unconventional monetary
policy have compressed income remaining after paying for indispensable shelter.
Chart
I-18, US, Consumer Price Index, Housing, NSA, 2001-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
Chart I-19 provides 12-month percentage changes of the
housing CPI. Percentage changes collapsed during the global recession but have
been rising into positive territory in 2011 and 2012-2013 but with the rate
declining then increasing into 2014. There is decrease into 2015 followed by
stability and marginal increase in 2016-2019 followed by initial decline in the
global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions),
in the lockdown of
economic activity in the COVID-19 event and then trough in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) with sharp recovery.
Chart I-19, US, Consumer Price Index,
Housing, 12-Month Percentage Change, NSA, 2001-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
The behavior of the US consumer price index NSA from 2001
to 2025 is in Chart I-20. Inflation in the US is very dynamic without deflation
risks that would justify symmetric inflation targets. The hump in 2008
originated in the carry trade from interest rates dropping to zero into
commodity futures. There is no other explanation for the increase of the
Cushing OK Crude Oil Future Contract 1 from $55.64/barrel on Jan 9, 2007 to
$145.29/barrel on July 3, 2008 during deep global recession, collapsing under a
panic of flight into government obligations and the US dollar to $37.51/barrel
on Feb 13, 2009 and then rising by carry trades to $113.93/barrel on Apr 29,
2012, collapsing again and then recovering again to $105.23/barrel, all during
mediocre economic recovery with peaks and troughs influenced by bouts of risk
appetite and risk aversion (data from the US Energy Information Administration
EIA, https://www.eia.gov/). The unwinding of the carry trade
with the TARP announcement of toxic assets in banks channeled cheap money into
government obligations (see Cochrane and Zingales 2009). There is sharp
increase in 2021 and into 2022-2025.
Chart I-20, US, Consumer Price Index,
NSA, 2001-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
Twelve-month percentage changes of the consumer price index
NSA area in Chart I-21. There is recent high inflation with current moderation.
Chart I-21, US, Consumer Price Index,
12-Month Percentage Change, NSA, 2001-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
The trend of increase of the consumer price index excluding
food and energy in Chart I-22 does not reveal any threat of deflation that
would justify symmetric inflation targets. There are mild oscillations in a
neat upward trend.
Chart I-22, US, Consumer Price Index
Excluding Food and Energy, NSA, 2001-2025
Source: US Bureau of Labor Statistics
https://www.bls.gov/cpi/data.htm
Chart I-23 provides 12-month percentage changes of the
consumer price of the United States excluding food and energy. There is sharp
increase after 2021 followed by oscillating reduction.
Chart I-23, US, Consumer Price Index
Excluding Food and Energy, 12-Month Percentage Change, NSA, 2001-2025
Source: US Bureau of Labor Statistics
https://www.bls.gov/cpi/data.htm
The Consumer Price index of the United States in Chart
CPI-H increased 2.7 percent in Dec 2025 Relative to a Year Earlier, The Tenth
Highest Since 8.9 percent in Dec 1981 was Followed by the Highest of 9.1
percent in Jun 2022, the Second Highest of 8.6 percent in May 2022, 8.5 percent
in both Jul 2022 and Mar 2022, 8.3 percent in both Apr and Aug 2022, 8.2
percent in Sep 2022, 7.9 percent in February 2022, 7.5 percent in Jan 2022, 7.7
percent in Oct 2022, 7.1 percent in Nov 2022, 6.5 percent in Dec 2022, 6.4
percent in Jan 2023, 6.0 percent in Feb 2023, 5.0 percent in Mar 2023, 4.9
percent in Apr 2023, 4.0 percent in May 2023, 3.0 percent in Jun 2023, 3.2
percent in Jul 2023, 3.7 percent in Aug 2023, 3.7 percent in Sep 2023, 3.2
percent in Oct 2023, 3.1 percent in Nov 2023, 3.4 percent in Dec 2023, 3.1
percent in Jan 2024, 3.2 percent in Feb 2024, 3.5 percent in Mar 2024, 3.4
percent in Apr 2024, 3.3 percent in May 2024, 3.0 in Jun 2024, 2.9 percent in
Jul 2024, 2.5 percent in Aug 2024, 2.4 percent in Sep 2024, 2.6 percent in Oct
2024, 2.7 percent in Nov 2024, 2.9 percent in Dec 2024, 3.0 percent in Jan
2025, 2.8 percent in Feb 2025, 2.4 percent in Mar 2025, 2.3 percent in Apr
2025, 2.4 percent in May 2025, 2.7 percent in Jun 2025, 2.7 percent in Jul
2025, 2.9 percent in Aug 2025, 3.0 percent in Sep 2025, no observations
available (NA) for Oct 2025 during the shutdown, 2.7 percent in Nov 2025 and
2.7 percent in Dec 2025.
Chart CPI-H, US,
Consumer Price Index, 12-Month Percentage Change, NSA, 1981-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
Table CPI-H, US, Consumer Price Index, 12-Month
Percentage Change, NSA,
1981-1983,
2019-2025
|
Year |
Jan |
Feb |
Mar |
Apr |
May |
Jun |
|
1981 |
11.8 |
11.4 |
10.5 |
10.0 |
9.8 |
9.6 |
|
1982 |
8.4 |
7.6 |
6.8 |
6.5 |
6.7 |
7.1 |
|
1983 |
3.7 |
3.5 |
3.6 |
3.9 |
3.5 |
2.6 |
|
2019 |
1.6 |
1.5 |
1.9 |
2.0 |
1.8 |
1.6 |
|
2020 |
2.5 |
2.3 |
1.5 |
0.3 |
0.1 |
0.6 |
|
2021 |
1.4 |
1.7 |
2.6 |
4.2 |
5.0 |
5.4 |
|
2022 |
7.5 |
7.9 |
8.5 |
8.3 |
8.6 |
9.1 |
|
2023 |
6.4 |
6.0 |
5.0 |
4.9 |
4.0 |
3.0 |
|
2024 |
3.1 |
3.2 |
3.5 |
3.4 |
3.3 |
3.0 |
|
2025 |
3.0 |
2.8 |
2.4 |
2.3 |
2.4 |
2.7 |
|
Year |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
|
1981 |
10.8 |
10.8 |
11.0 |
10.1 |
9.6 |
8.9 |
|
1982 |
6.4 |
5.9 |
5.0 |
5.1 |
4.6 |
3.8 |
|
1983 |
2.5 |
2.6 |
2.9 |
2.9 |
3.3 |
3.8 |
|
2019 |
1.8 |
1.7 |
1.7 |
1.8 |
2.1 |
2.3 |
|
2020 |
1.0 |
1.3 |
1.4 |
1.2 |
1.2 |
1.4 |
|
2021 |
5.4 |
5.3 |
5.4 |
6.2 |
6.8 |
7.0 |
|
2022 |
8.5 |
8.3 |
8.2 |
7.7 |
7.1 |
6.5 |
|
2023 |
3.2 |
3.7 |
3.7 |
3.2 |
3.1 |
3.4 |
|
2024 |
2.9 |
2.5 |
2.4 |
2.6 |
2.7 |
2.9 |
|
2025 |
2.7 |
2.9 |
3.0 |
2.7 |
2.7 |
Note: NA because of interruption of appropriations.
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
Chart CPI-H, US, Consumer Price Index, 12-Month Percentage
Change, NSA, 1981-2025
Source: US Bureau of Labor Statistics https://www.bls.gov/cpi/data.htm
No comments:
Post a Comment