Fact check: My friend thinks there is no inflation

Executive Summary:

Your friend’s claim that “there is no inflation” is contradicted by multiple recent measures and forecasts showing positive and in some cases rising inflation. Official reports and mainstream outlets document inflation rates above zero — including a June-quarter 2025 annual rate of 2.1%, and 2.9% year-over-year readings reported in August 2025 — while investment firms and government projections show disagreement on outlook and persistence ^{[1] [2] [3] [4]}. Below I extract the key claims, show the evidence and timelines, and flag the different perspectives and possible motivations behind the messages.

1. Why the “no inflation” claim doesn’t match headline statistics

Official and widely cited measures of inflation record positive price growth, not zero. In July 2025, ABC News reported an annual inflation rate of 2.1% for the June quarter, down from 2.4% in March, indicating inflation exists even if moderating ^[1]. By contrast, U.S. data reported in September 2025 show consumer prices rising 2.9% year-over-year in August, the fastest pace since January, and core inflation at 3.1%, both above central bank targets and clearly inconsistent with “no inflation” ^{[2] [4]}. Measured inflation is clearly positive across these reports.

2. Conflicting narratives: easing versus resurging inflation

The timeline shows mixed signals: some reports emphasize easing, others rising pressure. The ABC report in July 2025 emphasized a decline toward 2.1% and expectations of central bank easing, framing inflation as moderating ^[1]. Contrastingly, September 2025 coverage from CNBC and CBS documented a rebound to 2.9% year‑over‑year, highlighting tariffs and rising essentials as drivers ^{[2] [3]}. AXA’s January 2025 outlook warned of high inflation through 2025 driven by services and fiscal support, showing that forecasts diverged on persistence even before mid‑year data ^[5]. The story is mixed: some indicators fell, others resumed upward momentum.

3. Who is saying what — and why their agendas matter

Different organizations emphasize different risks. Central banks and government projections often highlight headline moderation or target ranges to justify policy choices; the Philippine government projected 2.9–3.1% for 2025, framing inflation as manageable ^[6]. Investment managers like AXA warned of sustained inflation risks to argue for particular asset strategies ^[5]. Media outlets such as CNBC, CBS, and the Associated Press reported short‑term upticks and daily impacts on households, which can push narratives about economic strain ^{[2] [3] [4]}. Understanding each source’s priorities helps explain divergent emphases.

4. What drives the differences in reported inflation — mechanics and components

Inflation readings diverge depending on timeframe and which components are emphasized. Headline CPI can be pulled by volatile goods like energy and food; core inflation excludes those and can show different trends — for example, core at 3.1% in August 2025 signaled stickier underlying services inflation despite headline swings ^[4]. Trade policies such as tariffs were cited as contributors to higher import prices and staples, which can lift headline rates quickly ^[2]. So “no inflation” ignores component dynamics and month‑to‑month variation that push aggregate rates above zero.

5. Real‑world impacts that contradict “no inflation” claims

Journalistic accounts document consumers experiencing higher bills and tighter budgets in 2025, which does not align with a zero‑inflation environment. CBS profiled Americans saying rising costs are “really challenging,” connecting CPI changes to household strain ^[3]. When core inflation runs above central bank targets, purchasing power erodes for those without wage gains, even if some headline measures moderate briefly ^[4]. Perception of inflation is reinforced by concrete price moves on essentials, undermining the “no inflation” narrative.

6. Short‑term outlook and uncertainty: why experts disagree

Forecasts differ because models weigh fiscal policy, services inflation, monetary stance, and supply shocks differently. AXA’s early‑2025 forecast anticipated elevated prices driven by services and fiscal support ^[5], while some government projections and mid‑year data suggested an easing trend ^{[6] [1]}. Later August 2025 readings reversed some optimism, showing a rebound to 2.9%, highlighting the role of new shocks like tariffs and energy price swings ^[2]. Forecasts are inherently uncertain; disagreement reflects different weightings of evolving shocks.

7. Bottom line for your conversation with your friend

The factual record shows positive inflation across multiple jurisdictions and months in 2025, with readings from 2.1% to 2.9% cited by reputable sources and government projections, which contradicts an absolute claim of “no inflation” ^{[1] [2] [4]}. The nuance is that inflation may be easing in some series and rebounding in others, so a precise claim would be that inflation exists but its trajectory is contested. If you want a succinct rebuttal, point to the latest CPI numbers and note that both domestic data and independent forecasters report non‑zero inflation.