Core Inflation

Everybody has noticed that prices are up on pretty much everything. Sometimes those price increases show up in quantity decreases when you're in the grocery store, but for me, anyway, everything from dry cleaning to toothpaste has increased in price over the last year.

The question is "Is this inflation?"  It could be that we are seeing a one time price rise, as the increase in energy prices ripple through the economy. But, unless the government engages in stimulus (as Nixon/Burns did in 1973 in response to the embargo), there should be no inflationary spiral.  

What we should get, in that case, is a recession, as wages hold steady and prices rise. That's a reduction in real income in econspeak. In English, it means people have to buy less stuff, because prices are higher and wages are not.

Krugman says that it does indeed look this way.