Original:
"Consumer prices surged last month on higher energy and food costs but underlying price pressures remained largely contained."
Translation:
"Consumer prices surged last month."
Here’s the breakdown:
"In January, energy prices rose 5%, after falling 2.1% in December. The advance was led by a 5.5% surge in electricity costs, the largest increase on record for that component. Gasoline prices last month rose by 6.4% and natural-gas prices increased 1.7%. Year over year, all energy prices advanced 24.8%.
Food prices were up 0.5% due to sharply higher fruit and vegetable prices. Medical-care prices increased 0.1%. Housing prices, which account for 40% of the index, rose 0.5%. Prices for new vehicles increased 0.6%. Clothing prices increased 0.3%, while education and communication rose 0.4%."
So to reiterate, except for everything going up in price, there is no inflation . . .
>
Source:
Consumer Prices Jumped 0.7%
As Food, Energy Costs Climbed
WSJ, February 22, 2006 8:49 a.m.
http://online.wsj.com/article/SB114061330703180066.html
What were the items that increased by less than 0.2%?
And since wages are still too high, more jobs keep moving overseas.
http://news.hereisthecity.com/news/business_news/5308.cntns
What were the items that increased by less than 0.2%? Pablum
Hey Barry,
I’m confused about the housing contribution to the CPI. You said 40% in this post, and less in this:
” The way BLS accounts for housing expenses is an oddity that creates all sorts of problems. Before 1983, CPI measured housing inflation by looking at what it actually cost to own a home: house prices, mortgage rates, property taxes, even maintenance. After 1983, BLS changed the housing component, using the concept of “owner’s equivalent rent.” It’s a measure of what homeowners could get for their homes if they rented them. It accounts for 23% of the overall CPI and about 30% of core prices, according to BLS.”
Am I misunderstanding something?
Barry,
I’ve never understood why food and energy are taken out of the “core rate” of inflation. I understand that prices are volatile in those sectors but those are precisely the sectors where people are going to see inflation first.
BTW, nice snark.
Aren’t the emperor’s new clothes beautiful?
Yeah thank god there is no inflation for me like the rest of you.
I dont use electricity, gas, natural gas and I stopped eating. So this inflation thing is no existant to me.
At the moment, the stock market seems to be going up as well on the news that there’s “no inflation.” If you watch these markets long enough, you’ll figure that up is down and down is up while CNBC is the Gospel Truth.
The Big Picture is a refuge from this insanity. Long may it remain so.
At least the dollar menu is still $1 :)
Govt I bonds, whose rate is set every 6 months to be at CPI + 1%, are currently paying 6.73% through April 2006. No inflation there – and I find it amusing people warn about putting $ here in case of deflation.
https://www.treasurydirect.gov/indiv/products/ibonds_glance.htm
For those who don’t know about I bonds, they do lock up your $ for a while, but the interest is free of fed taxes and can be paid yeary or when you cash in the bond.
HAHA.
The Big Picture: CPI reveals that except for everything going up in price, there is no inflation: CPI reveals that except for everything going up in price, there is no inflation.
Check with INTC if you think inflation is everywhere!