U.S. Consumer Price Inflation Rise To 5%
According to Bloomberg News, this was the highest yearly increase since 1991. Actually, though, inflation is probably worse now than it was then because that was before the Boskin commission recommended and got implemented various manipulations of the CPI in order to make the increases smaller than the raw numbers suggest. While this new methodology is applied on current data, it has not been used to retroactively adjust old numbers, meaning that comparisons of 1991 data and 2008 data is a case of comparing apples and oranges. Note that this fact does not rest on the view that the Boskin changes were illegitimate. If you think they weren't legitimate then current inflation is really higher than the numbers suggest. If you on the other hand think they were legitimate then inflation in 1991 was really lower than the inflation numbers suggested. Regardless of what you think on this matter, however, current inflation is in a relative sense underestimated compared to 1991 inflation. This in turn means that inflation now is probably higher than at any time in 1990 or 1991, and that you would have to back to the early 1980s or the 1970s for worse levels of price inflation.
Yearly inflation will likely continue to rise during July and August. What happens then is less certain, but even if it falls back from the high in August, it is likely to stay above 5% for the rest of the year.