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A “glimmer of hope” in March inflation report

Havard professor Jason Furman took a look at the higher-than-expected inflation recorded in March, coming in at 8.5 percent. Shocking as that year-on-year number is, he recommends looking at the core monthly data, to see the current state of the economy and remove volatility. At 0.3 percent, it’s the lowest since September, but welll above the Fed’s desired level at 4 percent over 12 months.

Looking at the recent annual inflation, “real wages fell 2.8 percent over the last 12 months. That is a larger decline than any pre-pandemic year in the last forty years.” However, taking a longer view of real wages since February 2020, they are “not nearly as historic an aberration as the last 12 months have been but nothing to brag about” having changed little.

Furman gives a “glimmer of hope”  that the worst may be behind us.