Gene
In an essay titled The Inflation Puzzle, Martin Feldstein, who needs no introduction, concludes his defense of the idea that inflation is a monetary phenomena with these paragraphs:
> Nonetheless, inflation will head higher in the year ahead. Labor markets have tightened significantly, with the overall unemployment rate down to 5.4%. The unemployment rate among those who have been unemployed for less than six months – a key indicator of inflation pressure – is down to 3.8%. And the unemployment rate among college graduates is just 2.7%.
> As a result, total compensation per hour is rising more rapidly, with the annual rate increasing to 3.1% in the first quarter of 2015, from 2.5% in 2014 as a whole and 1.1% in 2013. These higher wage costs are not showing up yet in overall inflation because of the countervailing impact of energy prices and import costs. But, as these temporary influences fall away in the coming year, overall price inflation will begin to increase more rapidly.
> Indeed, the inflation risk is on the upside, especially if the Fed sticks to its plan to keep its real short-term interest rate negative until the end of 2016 and to raise it to one percentage point only by the end of 2017. If inflation does rise faster than the Fed expects, it may be forced to increase interest rates rapidly, with adverse effects on financial markets and potentially on the broader economy.
>
> Read more at http://www.project-syndicate.org/commentary/low-inflation-quantitative-easing-by-martin-feldstein-2015-05#CoiRzGJKbSliJphW.99
A trivial quibble on this sentence:
>> The unemployment rate among those who have been unemployed for less than six months – a key indicator of inflation pressure – is down to 3.8%.
Wouldn't the number really be 100%? How does he get 3.8%?