Im having a hard time understanding the monthly inflation chart at this website.
http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?Symbol=USD
Did inflation seriously go up by 2.6% in Jan 2010?
SO does that mean the overall inflation of 2010 was ~ 20%?
WHat am i missing?
It’s hard for me to tell, but I suspect what’s being given is the annualized rate of inflation. In other words, take the rate of inflation that happened during a month and pretend that that rate lasted for a year. That’s the annualized rate. The reason that this sort of rate is given is that it allows one to compare a recent month with some previous year. So if you’re told that the rate for the previous month was X percent and the rate for some year a while ago was Y percent, you want to know if the rate for the previous month was more or less than the rate for that year. The raw rate for that month doesn’t tell you that, since the raw rate for a month is almost certain to be less than the rate for a year. The annualized rate for the month allows you to compare the month with the year.
The key is in the December press release:
So it appears the monthly numbers are rolling annualized inflation rate numbers.