Could The Price Of Chocolate Chip Cookies Predict The CPI? A Look Behind The Inflation Headlines

Now that the debt-ceiling non-crisis is behind us, the headlines are again full of debate and hand-wringing over inflation, interest rates, and the recession that stubbornly refuses to reward all those economists who have been predicting one since the winter before last.

The future did look bleak last June when the annual inflation rate topped out at 9.1%. Despite the steady drumbeat about the dire threat of rising prices, inflation has been steadily declining, with the latest year-over-year Consumer Price Index down to 4%.