0% 0% 0% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% 0% 0% 0%
If there's a .8% price increase per month, every month, it looks like:
+10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10% +10%
The upside of reporting this way:
* Seasonal effects are (mostly) removed
The downside:
* You have to have a lot of context about surrounding numbers to try and distinguish between these scenarios.
* The drop from +10% to 0% is not related proximally at all to the real change.
* Even if you are careful in interpretation, information and context are removed.
It's not very user friendly or useful as a single number to get an idea about what's happening with prices now.
> If we're honestly at the point where this is considered too confusing for the masses, I think I've stopped thinking democracy is a good idea.
I have a lot of knowledge about economics and mathematics, and it's frequently confusing for me and difficult to tease out what's really happening with prices from a couple of macroeconomic aggregates. If that makes you give up on democracy, uh, so be it.
Well, that makes it even worse, the "flow through" you're describing from prices increasing because an input price increased. That spreads the initial shock over a longer term.
But the effect I'm describing shows up even if it's just a single good that steps once. What's measured in the YoY inflation number is a convolution/FIR filter of 12 months of changes.