How Bad Is the Inflation Situation?
The 7.0% annual change in CPI is the largest increase in nearly 40 years. The yearly change in inflation has been accelerating due to very supportive base effects. Small monthly gains from Q4 of last year have been replaced with higher inflationary pressured sectors impacted by pandemic-induced shortages. For example: used cars (37.3% y-o-y), new cars (12.0% y-o-y), and apparel (5.8 % y-o-y).