St. Louis Fed, Report: Understanding the Recent Behavior of Inflation

“The pandemic has shifted the distribution of inflation to the right. That is, during the COVID-19 period, a larger share of consumption expenditures were on products that experienced higher inflation rates than in the pre-pandemic years. The current high inflation episode is a widespread phenomenon and not the result of a few outliers.”

“The distribution of inflation across product categories also highlights several important differences between the pre-pandemic and COVID-19 periods. From 2016 to 2019, 18% of consumption expenditures were on products experiencing negative inflation; this proportion drops to less than 1% in the COVID-19 period. Conversely, the share of expenditures on products experiencing more than 5% annual inflation was only 5% in the pre-pandemic period and rose to over 40% during the COVID-19 period. These are significant changes that help us understand the nature of the current high inflation.”