Misquoting Inflation

Inflation

FRED

Data Science

I explain why annualized rate is not year over year

Author

Mike Aguilar

Published

December 12, 2024

I was reading the 12Dec2024 edition of a Morning Brew newsletter, which I always enjoy. It mentioned yesterday’s CPI report for Nov`24, which printed at a 2.7% y/y rate. The newsletter said this was an “annualized rate”. That is wrong. Here’s a video explainer about why that’s wrong and how to compute it correctly.