The Corner


Inflation — and a Timely NR Capital Matters Webinar Today at 2 P.M. EDT

Kevin Hassett answers a question from reporters during the daily briefing at the White House in Washington, D.C., November 17, 2017. (Carlos Barria/Reuters)

“Our Fed has done things which no Fed has ever done before . . .”

“Yeah, yeah, but your Fed was so preoccupied with whether or not it could, that it didn’t stop to think if it should.”


Prices paid by U.S. consumers rose in May by more than forecast, extending a months-long buildup in inflation that risks becoming more established as the economy strengthens.

The consumer price index climbed 0.6% from the prior month after a 0.8% jump in April that was the largest since 2009. Excluding the volatile food and energy components, the so-called core CPI rose by a larger-than-forecast 0.7%, according to Labor Department data Thursday.

The gains were fairly broad and driven by steady growth in the costs of used vehicles, household furnishings, airfares and apparel. The increase in previously owned cars and trucks accounted for about one-third of the total monthly advance in the CPI, the Labor Department said.

Price pressures continue to build across the economy as businesses scramble to balance a rush of demand against shortages of materials and, in some cases, labor. Shipping bottlenecks, higher input costs and rising wages are challenges to companies looking to protect profit margins…

Compared with the same month a year ago, the CPI jumped 5%, the largest annual gain since August 2008, though the figure remains distorted by the base effect. The comparison to the pandemic-depressed index in May 2020 makes year-over-year inflation appear stronger.

The core measure rose 3.8% from 12 months ago, the most since 1992.

Capital Matters Webinar, Thursday, June 10, 2 p.m. (EDT)

Inflation — Should We Be Concerned?

National Review Institute and National Review Capital Matters presents a conversation with Kevin Hassett, former senior adviser and chairman of the Council of Economic Advisers in the Trump administration, and Rich Lowry on inflation.

Inflation has been so low for so long that most Americans understandably see persistent inflation as ancient history, and that any blip up today will quickly be reversed. But, is persistent inflation around the corner? Inflation and commodity prices are up sharply. The latest Michigan survey shows people expect 3.7 percent inflation next year. Shortages of everything from lumber to semiconductors have raised input prices for businesses, while the percentage of small businesses reporting that they cannot find qualified workers is at a record high. The ingredients are in the pot, and the fire is on. But will the pot boil?

RSVP here.

Meanwhile, over at Capital Matters, Philip Klein thinks we should be concerned:

For the last decade or so, as the nation’s debt grew and the Federal Reserve kept pumping money into the financial system, there were periodic warnings about the risk of inflation. Yet these fears were never actually realized. As a result, in the face of growing signs of inflation, many people — including the ones who happen to run our nation’s fiscal and monetary policy — aren’t taking the current threat all that seriously. This is worrisome, because in reality, a growing body of evidence — major economic indicators and announcements from small and large businesses — suggests that inflation is quite real . . .



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