Why do economists and the media only focus on year over year inflation?

[Anonymous]

It feels like every news story about rising prices only focuses on the inflation rate of prices now vs last year. But common sense seems like the bigger problem is the cummulative compounding effect of several years in a row of inflation making it feel like we are all just digging ourselves further into a hole where costs are just not keeping pace with incomes and each year of inflation just piles onto the problem.

[Anonymous]

I don't think your premise is entirely true. I mean, sure for setting policy they focus on inflation in the here and now (both YoY and monthly increases) because policy needs to reflect what is currently happening.

There are plenty of studies and analysis regarding wage growth as compared to inflation over a period of years. I think WSJ actually just had a piece showing how low income earners are falling behind in terms of inflation-adjusted wage gains over the past few years.

[Anonymous]

It's not economists, it's journalists.

[Anonymous]

Anonymous wrote:It's not economists, it's journalists.

Exactly, and this is why the Fed has been traditionally very focused on keeping inflation down, because long run high inflation accretes so much.