Krugman says the war on inflation is over. Not so fast, others say.

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New York Times columnist and Nobel Prize-winning economist Paul Krugman declared the war on inflation over Thursday, but other economists are saying, “Not so fast.”

In a post on X, Krugman said, “We won, at very little cost.”

The post seemed designed to spark reactions, and it did.

Some people, like Tim Murtaugh, who previously served as communications director for former President Donald Trump’s 2020 campaign, were quick to note that Krugman used a measure of consumer inflation that excludes food, energy, shelter and used cars.

When food, energy, shelter and used cars are not excluded, the data looks OK but not great.

Others thought Krugman was simply out of touch.

Olivier Blanchard, former chief economist at the International Monetary Fund, compared Krugman’s assertion to President George W. Bush’s famous appearance on an aircraft carrier during the war against Iraq.

The Labor Department reported earlier Thursday that consumer inflation had increased 3.7% over the past 12 months. That’s down from a peak of 9.1% in June 2022 but still a long way from the Fed’s target of 2%.

The last time that the CPI was under a 2% annual rate was in February 2021.

Most economists use the 12-month rate for inflation trends. But the three-month rate is also a popular gauge.

The three-month core inflation rate increased to 3.1% in September from 2.4% the previous month.

Federal Reserve officials are being cautious. Minutes of the Fed’s September meeting showed that the data over the past several months suggested that inflation was slowing, but most participants continued to see risks that inflation could turn higher again.

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