These numbers are borderline meaningless for the average American. Economists, wall street, and financial news pundits can go back and forth all they want, the average person is most definitely feeling a massive crunch and a percentage number isn't going to explain away the rot building underneath the floor. IMO, the big elephant in the room is household debt - people are extremely leveraged, and inflation data doesn't illustrate this. Inflation #s to me is a political chip that administrations on both sides use for finger pointing.
I think it's something beyond just this. Inflation, especially how it's being used today, increasingly feels like a metric almost as pointless as GDP. Because what people, laymen and expert alike, refer to when they speak of inflation is all driven by a focus on what really matters - prices. Obviously the rate of change of prices, inflation, is extremely important but only as a means of gaining insight into the prices themselves.
But now inflation is being considered as a metric of priority, by itself - which distorts its purpose (akin to what happened to GDP). And we're in a perfect illustration of why. Prices have dramatically increased, but now that they're continuing to increase beyond this at a rate of change is "only" 50% higher than the desired rate of change the Fed was aiming for, back when prices were lower, you have some people ready to unfurl "Mission Accomplished" banners. Clearly, the metric has become more important than the meaning, again like GDP.
Gallup maintains an active economic impressions survey here [1], and currently we're at lows matched only during the housing market crash in terms of economic confidence. And I've no doubt this is playing into it. From the perspective of people continuing to pay intolerably high prices for effectively everything, seeing economists cheer about this is going to look alot like the 'this is fine' meme to basically everybody on the outside.
