Economics
Why Economists Got It Wrong on U.S. Inflation
- Price gains at 6.2%, a 30-year high, surprise forecasters
- Excess savings, virus variant, goods demand all played a role
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Economists are getting a dose of humility on forecasting inflation after a resurgent coronavirus, a tenuous global supply network and stimulus-fueled consumers combined to send U.S. prices well beyond the expectations of Wall Street and policy makers.
The government’s latest inflation read on Wednesday showed a 6.2% annual jump in consumer prices that exceeded all projections. Previously confined to categories mostly associated with the economy’s reopening, the October data indicated a broadening of inflationary pressures.