The latest inflation data for the US has been released, and the headline CPI-U annual increase of 5.4% is once again raising worries that high inflation could be a permanent part of the landscape for the near future.
My personal opinion is that the picture is much too muddled now, between temporary supply issues and low bases for 2020 prices, to say much about the medium-term picture. I think we’ll have a better picture by the end of the year. Still, it’s worth drilling down into the data, as we have done in the past on this blog, to understand some things about economics, prices, and how price changes are impacting real people.
Certainly the prices of some goods are rising at alarming rates. Many of these are related to automobiles and transportation generally, but some categories of food have rose a lot in the past year too (though groceries overall are only up 2.6%).
But I want to talk about two categories of consumption: beer and hot dogs.
Actually, my co-blogger Zachary has already written about beer. And using the producer price index, he found that canned beer is actually cheaper than it was a year ago. If you like canned beer, rejoice! And for all beer at home, the CPI shows only a 1.8% increase since last year, after a similar small 1.6% increase last July (not much of a base effect… a clue for later!).
But not all Americans consumer alcohol. So let’s talk about that most American food product: the hot dog.
Why should we care about hot dogs? Read on.Continue reading