Is Inflation Fever Rising, Or Is It Just A ‘Seasonal’ Flu? | Global News Avenue

Inflation is hotter than forecasts in January than forecasters, but the data quirk involving seasonal adjustments means some economists have stopped announcing that high inflation during the pandemic has reignited.

Cost of living according to consumer price index Rose unexpectedly quick In January, it increased its annual growth rate by 3% for the first time in six months. This is the fourth increase in annual growth in several months, adding to the alarm bell, the pandemic’s inflation outbreak (which seems to have reached a comfortable annual rate of 2% last year), lifting the ugly head again.

But at least some revival of inflation may be the data of the Haishi Rage Building.

Seasonal adjustments may increase

This is because the Bureau of Labor Statistics is based not only on price increases, but also on the fact that prices follow seasonal patterns. Check only the price tags, prices rise in January, but no matter what happens to the economy, many companies usually rise every January.

The real problem in determining inflation trajectory is how much the price has risen. The Bureau of Labor Statistics will adjust this when calculating the index.

In addition, the bureau is constantly adjusting its adjustments. Each January, the bureau recalculates its seasonal adjustments based on data from the previous year. This adjustment has caused inflation to rise slightly in January, causing some economists to use a grain of salt to produce new inflation figures.

Some experts also suspect that the bureau’s approach is not flattened in all seasonal price fluctuations, meaning there is still some “residual seasonality” in the data.

“The sharp rise in CPI in January was largely due to the slow adaptation of seasonal adjustments, for the post-pandemic large cluster gains in the first month of the year.” In the comments wrote.

“The revised seasonal adjustments and relatively important weights date back to five years, which could exacerbate the January update,” Kathy Bostjancic, the national chief economist, wrote in a comment. High print, we hope the nation’s chief economist Kathy Bostjancic wrote in the comments.

This happened before

Some economists started feeling a deja vu feeling from 2024 when inflation rates increased more than expected in the first three months of the year, which caused red flags about price pressure, only later this year cool down.

Ryan Sweet, chief U.S. economist at Oxford Economics, wrote: “We don’t want to bring all the advantages of the remaining seasonality to the point, but as the details shift, it seems to be higher than inflation in early 2024.” Highly similar expected.” Comments.

Nevertheless, few people are willing to think of it as flushing the inflation rate higher than expected. True inflationary pressures are building, including expectations for President Donald Trump’s campaign Tariff collection Targeting U.S. trading partners will increase the price of imported goods.

“Inflation will remain stubborn for a while,” Chris Clarke, an economist and professor at Washington State University, wrote in a comment. “The future is not good for lowering inflation.”