how is inflation calculated


ok, suppose the news says inflation is up 8% this month. And last month it rose 7%. When is the starting point? Does this mean that over the past 2 months that things cost on average 15% more than they did 2 months ago?

In: 2

Those numbers are compared to the same month last year. So, it doesn’t mean that prices have risen 15%.

It’s price increase over same month, a year ago… so 8% increase in July means prices for a basket of goods cost 8% more overall than last July. The June number looked at June ’22 vs. June ’21. So no, prices are not up 15% from 2 months ago, things are consistently 7-8% higher than a year ago month to month.

When people say inflation it’s normally annual inflation, so it would be both months compared to the same month a year before. Some places also report month on month inflation but that’s less common and should be explicitly called that.