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What makes you think inflation is a year-over-year (YoY) metric? At the end of the day, inflation is an increase in the general level of prices. Whether you use
by 1980phipsi 4y ago
What makes you think inflation is a year-over-year (YoY) metric? At the end of the day, inflation is an increase in the general level of prices. Whether you use YoY or month-over-month (MoM) doesn't really change that.
Now, you more commonly see YoY numbers cited because annualizing MoM numbers results in a lot of volatility. Seasonally adjusted MoM numbers are actually what the CPI report mentions first [1].
If you look at macroeconomic models, the inflation variable is typically defined as a one period change in prices (or potentially instantaneous, for continuous time models) as that makes the math easier to work with.
[1] https://www.bls.gov/news.release/cpi.nr0.htm https://www.bls.gov/news.release/cpi.nr0.htm
- 1980phipsi 4y agoI should probably add that I'm being a little pedantic. For your broader point, the journalists could more accurately say that "the year-on-year percent change in the CPI eased to x% from y%" to be more accurate, but I think most people who are reading it understanding that saying "inflation eased to x% from y%" to be a shorthand for that.