3% Inflation: What to Expect & How to Adapt

Is “three” the new “two?” Consumer prices notched another 3% year-on-year increase in September, according to data published Friday from the Bureau of Labor Statistics. No one in Washington seems bothered that this remains well above the Federal Reserve’s 2% inflation target.

The headline measure of consumer-price inflation rose 0.3% from August to September, with so-called core prices excluding food an energy increasing 0.2%. But core inflation also hit 3% year-on-year, a signal that households’ purchasing power continues to drop at a rapid pace. The White House press office hailed this as an anti-inflation triumph.