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Trivia Tidbit Of The Day: Part 332 -- Inflation Out Of Control.

If These Are "Record" Energy Prices, How Is It That Inflation Is So Low?-

The average annual inflation rate from 2001 to 2005 was 2.56%. Indeed, despite "record" energy prices, inflation remains tame:

Compare the recent numbers to the average annual rate of inflation from 1993 to 2000: 2.6125%.

Or 1977-1980: 9.725%.

Even with "record" energy prices, a housing boom, and GDP growth well above modern historical averages (let's go back 35 years), inflation is just plain under control:

Now, of all the economic indicators out there, inflation is one of the harder ones to tie to an administration's economic policies. Nevertheless, inflation (along with job creation and the stock market) is one of the primary shortcuts Americans use to judge the health of the economy.

Although inflation is low today, the overwhelming media hype about gas prices has likely contributed to a false sense that we once again have 1970s-style runaway inflation.

Thus, even though inflation is low, and American presidents usually (and, usually unfairly) get credit or blame for inflation, President Bush is likely getting credit/blame for high inflation.

Previous Trivia Tidbit: Tax Cuts Worked, Majorities Matter.

Posted by Will Franklin · 15 May 2006 02:03 PM

Comments

Posted by: KipEsquire at May 15, 2006 03:05 PM

Posted by: Drew E at May 15, 2006 05:09 PM