Consumer price inflation reached almost 3% in 2011, its highest rate in several years, with higher energy and food prices the main culprits. As a result of that pick up in inflation, the increase in real personal incomes in 2011 was, other than the recession in 2009, the worst performance in a decade. The good news, however, is that inflation should drop back sharply in 2012, helping to support real income growth.
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