Pandemic Inflation Has Flipped: Now It’s the Rich Who Pay More

Inflation rates are now higher for top-earning U.S. households than those on low incomes, reversing the trend that took hold earlier in the pandemic, according to research by Harvard economist Alberto Cavallo.

Covid-19 has caused headaches for price statisticians because it’s changed the way people spend. Headline measures of U.S. inflation use a basket of goods and services that’s based on pre-pandemic shopping habits -- so it doesn’t always capture the higher prices that Americans have been paying in the past 18 months or so.