You’ve probably heard politicians discussing the inflation rate ad nauseam given its direct impact on both the cost of living and the economy. Though inflation has undeniably increased since President Joe Biden defeated former President Donald Trump in the 2020 election, it’s not uncommon to hear from our elected officials that inflation is “down.”
What does that actually mean, though?
First off, to assert that inflation is “down” without including a date at which it decreased doesn’t tell us much. Since when is inflation down?
Since yesterday? Did the price of gas drop in between the time my head hit the pillow and the time I woke up? Is it down since- take your pick- 2010? 1900? 1800?
To say that inflation is down without referencing a date at which it started decreasing is to purposefully mislead the public. Likewise, to assert that inflation is “up” without citing a start date is also to muddy the waters with regards to how prices have changed over a certain period of time.
This erroneous communication style palls in comparison to another strategy politicians use to assert that inflation is “down” or “up.”
Many will claim that inflation is down by implicitly referring to the rate at which the metric is moving over time.
It is entirely possible for inflation to increase month-to-month and for the rate at which it’s increasing to decrease month-to-month. Inflation could be at 4% one month and then jump to 5% the next, but if the third month yields a 5.2% rate, politicians and members of the media might erroneously yell from the rooftops: “Inflation is down!”
That’s not entirely wrong, since the inflation rate is indeed moving in the right direction, but it’s quite misleading. Yes, the rate at which inflation is increasing is decreasing, but inflation itself is still increasing.
Whether our politicians need to brush up on their understanding of calculus or not is up for debate, but there’s no question that a call for more accurate communication is needed.
Given the public’s broad distrust of the government, there’s no better time than now for our country’s leaders to stop misleading the public and explain economic data in a thorough manner.
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