The New Yorker:

As the inflation rate continues to fall, a new White House study emphasizes the central role that supply-chain disruptions have played in the economy.

By John Cassidy

As economists and pundits continue to debate why Americans aren’t feeling better about the economy despite healthy growth and falling rates of inflation, the inflation outlook itself continues to improve. Last week, the Commerce Department reported that, according to a measure that the Federal Reserve watches closely—the Personal Consumption Expenditure (P.C.E.) deflater—consumer prices rose by just three per cent from October, 2022, to October, 2023. That’s not far above the Fed’s target of two per cent, and, in the case of some items, including gasoline and used vehicles, prices are falling, not merely going up at a lower rate.

As usual, the story can be complicated by considering different measures of price rises. For reasons that I’ve never found wholly convincing, many economists focus obsessively on “core” inflation, which excludes the prices of energy and food. According to the P.C.E. core index, the core rate is still running a bit higher: 3.5 per cent. But, in the three months from August to October, it rose at an annualized rate of just 2.2 per cent. “The short-term rate of price increases is now very close to target, and slowing,” the economic advisory firm Pantheon Macroeconomics noted in a client circular.

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