Year-to-Date Inflation

Think of it this way

It is the car's trip odometer reset to zero on January 1. Each month adds a stretch, and in December it shows how far you have traveled during the year.

What is Year-to-Date Inflation?

The compounded sum of inflation so far this year. In January it starts almost at zero, grows with each monthly figure released and in December reaches the total for the year. The following year it starts again. It is how inflation is tracked in countries that live with it: people do not ask how much prices rose this month, but how much has built up so far.

How to read Year-to-Date Inflation

The curve rises within each year and drops to zero in January, so it reads as a series of ramps. What matters is the SLOPE compared with the previous year at the same point in the calendar: if in June it is above where it was last June, this year is shaping up worse. And the December point is the inflation for the year, the figure that ends up being quoted. Lag: none; here inflation is the consequence, not the cause.

What Year-to-Date Inflation means for the market

It does not move the market on its own, because it brings no new information: it is the sum of figures already published. Its value is as context, to know whether the year is on track for the central bank's target or drifting off while there are still months to go.

Where the money flows

No money moves here: it is the same increase in the cost of the basket, counted from the start of the year instead of month by month. Example: if it reads 2% in June, everything you bought in January costs 2% more today, even though each month on its own seemed minor.

What to watch in Year-to-Date Inflation

Compare it with the same date in previous years, which is the only thing that makes it useful. And bear in mind that a month without data does not break it: since it is measured against the December level and not by chaining months together, a gap in the calendar does not carry the error through the rest of the year.

How much more expensive the basket has become since December 31. It resets to zero every January.