If you are purchaser of computers, women’s clothing, or household furnishings, well then I have some good news for you: Everything is on sale, and prices are falling!
However, if you regularly buy Fuel, use transportation, need hospital services, education, books, eat food at home, pay tuition, require medical care, eat out, drink booze, or pay rent, well, sorry: Everything is costing you more.
Even if you back out food & energy — inflation ex-inflation — we still have rising prices, and elevated inflation expectations.
This leaves the Fed painted into a corner — the weak dollar, caused in large part by low rates, is adding to inflation. But the recession and the credit crunch are preventing the Fed from appreciably raising rates.
Here’s your cost increase picture, measured year over year:
click for bigger graphs