Key Inflation Measures Are Falling at Their Fastest Pace in 40 Years
After stripping out mismeasured housing prices, core inflation had its biggest 12-month drop since the massive disinflation of the early 1980s. Larry Summers continues to be wrong about inflation.
Lawrence Summers, president emeritus and professor at Harvard University, speaks during the Institute of International Finance (IIF) annual membership meeting in Washington, DC, on October 14, 2022. (Ting Shen / Bloomberg via Getty Images)
Last Friday, the Commerce Department released its monthly update on personal income and spending, and as it does every month, the latest release, covering February, includes data on a key measure of inflation that’s closely watched by the Fed: the Personal Consumption Expenditures (PCE) price index, both in its overall “headline” version and an array of variants.
Over the past two years, we’ve gotten used to hearing about record-breaking inflation readings; last June, for example, the Consumer Price Index rose at its fastest twelve-month rate — 8.9 percent — since the peak of the 1970s–early 1980s inflation wave that was finally brought to an end by former Fed chair Paul Volcker’s brutal reign of tight money.
But this month’s record is a little different.
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