Inflation's spike leaves lasting anxieties

"Certain folks would like to tell you that inflation is cured. And in some ways, if you track inflation by the Consumer Price Index, there is some truth to the thesis that the cost of living has returned to its normal, modestly upward path. Ponder a California inflation index from my trusty spreadsheet, which averaged four decades' worth of annual changes in regional price indexes for Los Angeles-Orange County, San Diego and San Francisco."

"By this math, California consumer prices rose 3.1% last year. That's flat with 2024, equal to statewide inflation's 40-year average and nowhere near the 6.9% peak of 2022. Nationally, it's a similar price picture: 2.6% inflation last year, below 2.9% in 2024, and the 2.8% 40-year average. And certainly not the 8% of 2022. That all seems rather modest. On to the next challenge, no?"

"Well, many folks who juggle tight household budgets might disagree with the inflation data showing some normalcy. Inflation's spike has left lasting anxieties. Bad flashback California is expensive enough with a bout of inflation. The recent cost-of-living surge was especially painful because it was a sharp contrast to what had been enjoyed in the post-Great-Recession economy."

California consumer prices rose about 3.1% last year, matching the state's 40-year average and well below the 6.9% peak of 2022. National inflation ran roughly 2.6% last year, near the 40-year average and below 2024's figure. The sharp 2021–2022 inflation spike left lasting anxieties for households, especially where living costs were already high. The decades before the Great Recession showed volatile, higher inflation with several price bubbles, while the Great Recession and the 2009–2020 period produced muted price growth. Recent surges felt especially painful because they contrasted with the long stretch of low inflation.

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