Zero Inflation?

Was 2008 really the year of zero inflation? Perhaps not. From the WSJ’s Real Time Economics:

Measured on a December to December – or calendar year – basis, the consumer price index only grew 0.1% in 2008, according to Labor Department figures, the smallest gain in over 50 years and well below the 4.1% gain in 2007.

But when the annual average of the CPI for all of 2008 is compared to the average for 2007, the increase was much higher, 3.8%. That was actually up from 2007’s rate.

“It’s unusual for there to be this big of a difference,” said Labor Department analyst Stephen Reed. The two series sometimes line up exactly, and usually when there’s a gap it’s only a few tenths of a percentage point.

I actually prefer the calendar year measure, but an anomaly nonetheless.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s