How the drivers of inflation have changed.

Americans have spent the last two years dealing with rapid inflation, but the drivers of inflation are evolving.

The data show that the war in Ukraine has only exacerbated the painful inflation and government response to it caused by the pandemic disruption two years ago. This combination led to the biggest price increase in half a century. Inflation is now lower as supply problems are resolved and the economy slows, but the road back to normality is still long and uncertain.

U.S. inflation today is very different from the price gains that first appeared in 2021. This is due not to the cost of goods, but to stubborn price increases for airfare and services such as childcare.

service costIncluding non-physical purchases such as tutoring and tax preparation, which began to increase rapidly by late 2021. Landlords, childcare providers and restaurants were in good spending shape because families had more money than usual after staying home for months and repeated stimulus checks. Charge more without losing customers.

The 24 months of inflation that ended in March undermined wage growth, strained consumers and spurred a Federal Reserve response that could trigger a recession.

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