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Inflation and Prices

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Is “inflation” worsening? Retail prices, as measured by the Consumer Price Index (CPI), posted a steep gain of 0.6% in June (or 7.2% annualized), compared to May’s 0.1% increase. And over the past 12 months, retail prices rose more sharply than they did in all but one other 12-month period since 1991. (The sharpest increase since 1991 came earlier this year.) The latest year-over-year increase in the PCE Chain-Type Price Index shows a similar pattern; it too is near its highest point in several years. Nevertheless, it’s unlikely that inflation is worsening much.

Suggested citation: "Inflation and Prices," Federal Reserve Bank of Cleveland, Economic Trends, no. 00-08, pp. 07-08, 08.01.2000.

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