Nobel economist Paul Krugman gets trolled for saying inflation is over if you just exclude most of what people buy

• Paul Krugman was mocked for declaring inflation is over based on a heavily adjusted measure.
• The Nobel economist shared a chart that excluded basics like food, energy, shelter, and used cars.

Paul Krugman was widely trolled on Thursday for saying that if you just ignore food, energy, housing, and used cars — unavoidable costs for many Americans — then the period of surging prices has passed.

"The war on inflation is over," he posted on X, attaching a chart showing the Consumer Price Index (CPI) dropped from 7% last summer to below 2% in September if you exclude those four items. "We won, at very little cost."

The Nobel Prize-winning economist and New York Times columnist faced immediate backlash to his heavily adjusted yardstick of price growth. His X post was still at the top of the popular Wall Street Bets subreddit on Friday morning.

"A totally ridiculous measure," Jim Bianco, president and macro strategist of Bianco Research, said about Krugman's chart in an X post. "It excludes 55% of the index."

"The joke was if you take all the stuff going up out of the index, you have no inflation," he continued. "That was supposed to be a joke, not taken literally by a Nobel Laureate."

Chris Martenson, an economic researcher and the founder of Peak Prosperity, also poked fun at the top-flight economist.

"He's right! Paul Krugman is right, and it pains me to say that because he's usually wrong. I re-ran his numbers making a few more exclusions and it turns out inflation is actually 0%," Martenson posted on X. He attached a satirical chart suggesting inflation would be zero if even more sectors like healthcare, education, and travel were excluded.

Krugman, a retired MIT and Princeton economics professor, admitted to being too dismissive in a follow-up X post on Friday. But he doubled down on his view that price growth has subsided, noting other measures of underlying inflation peg it below 3%.

"I was too flip here," he said, explaining that he'd used the same yardstick in the past and wanted to be consistent. Many economists look at core inflation measures that exclude volatile items such as energy, to get a better sense of underlying price growth.

"People have been reluctant to call this," he continued. "But the data really want to tell us that inflation has very nearly normalized."

Inflation soared as high as 9.1% last year, as a post-pandemic demand boom and supply-chain problems drove up prices. In response, the Federal Reserve hiked interest rates from virtually zero to over 5% in the space of 18 months. Headline inflation has now dropped to below 4% for four straight months, but it remains above the Fed's target rate of 2%.

American consumers have faced a double-whammy of fast-rising prices and surging borrowing costs since last spring. They've seen the prices of essential goods including food, gas, and housing shoot up, while higher rates have raised their monthly credit-card, car-loan, and mortgage payments.

Krugman appears to have faced backlash not just because of his chosen inflation measure, but because he seemed to shrug off the pain of higher living costs felt by many people. Indeed, the squeeze on household budgets has fueled fears of a recession and spike in unemployment — although those have dissipated in recent weeks as consumers have proven surprisingly resilient to the financial pressures on them.