[sgbuffett]

Inflation rate is measured by comparing prices today with 1 yr ago.

If my hawker center porridge selling increase price one time in march this year by 20% in April I will measure inflation rate of 20% for porridge this remains so for 1yr . But in April 2023 the inflation will drop from 20% to zero because price of porridge in April 2022 is same as in April 2023.

We saw sharp price hikes from around Nov 2021 to May 2022. Then the prices more or less stop rising. It means we will see inflation drop to low levels in May 2023.becauee prices have not risen much since May 2022.

Below is the real-time yr on yr inflation rate. You see a steady decline in inflation in USA.



You look at month on month, week on week data for various category of good you will see prices falling or deflating but still higher than 1yr ago. But once we go further out such that the price where spiked is more than 1 yr ago the inflation rate will drop to near zero or below.