Kai Ryssdal: You might have come across this headline at some point today: Overall inflation cooled a bit last month. That much is true.
But here’s what the shorthand doesn’t quite get across. What had been fairly limited, and fairly moderate, price increases are spreading across the board. Americans paid more for everything from cars and clothing to medical care and tickets to the theater or the ballgame in May. Truth be told, core inflation actually rose the fastest in almost three years.
Our senior business correspondent Bob Moon has more.
Bob Moon: Now should we worry about inflation? Up to this point, the Federal Reserve has factored out what economists consider the most volatile — or temporary — price spikes.
But economist Chris Rupkey points out so-called “core” inflation — a measure of broader and more lasting pricing pressure — is getting harder to ignore.
Chris Rupkey: This is a little bit what the Fed was concerned about. They always said, don’t look at the food and energy prices going up, watch the core. Because the core is more indicative of where inflation will be in the future.
So, now should we worry about inflation? Actually, Rupkey, who watches the U.S. economy for the Bank of Tokyo-Mitsubishi in New York, sees reason for hope amid these latest numbers.
Rupkey: It is kind of self-correcting here. Gas prices went up $1.25; we’re back down 25 cents — that’s better than nothing. And the fact that gasoline prices have reversed a little is something that could bode well for growth going forward.
In fact, Fed chief Ben Bernanke has been making the argument that this, especially, is not the time to worry about inflation.
Joel Naroff: At this point, he would rather risk some higher inflation in order to get better growth.
Economist Joel Naroff doesn’t see “stagflation” as a threat, either, since the economy is still growing — albeit sluggishly. He says Fed policymakers are right to stay focused on that.
Naroff: They can’t afford to have this economy stall, because there’s really no more bullets left either in monetary policy or fiscal policy, so they have to make sure what’s going on right now works.
In other words, don’t worry — but don’t be happy yet, either.
I’m Bob Moon for Marketplace.
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