Here’s a great post from The Big Picture on the Consumer Price Index.
Its so funny, I’m reproducing the whole post.
CPI reveals that except for everything going up in price, there is no inflation
“Consumer prices surged last month on higher energy and food costs but underlying price pressures remained largely contained.”
“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 . . .
Consumer Prices Jumped 0.7%
As Food, Energy Costs Climbed
WSJ, February 22, 2006 8:49 a.m.