Consumer Price Index: 2.9% Annual Rate

The Labor Department reported that the consumer price index rose 0.2 percent in January, paced by a surge in apparel costs, and the official measure of U.S. inflation now stands at an annual rate of 2.9 percent, down from a 3.0 percent rate in December.

The so-called “core rate” of inflation – excluding food and energy – also rose 0.2 percent in January and now sports a 2.3 percent year-over-year gain, its largest 12-month increase since September 2008.

source

CPI: 3.6%

The Labor Department reported that U.S. consumer prices decreased 0.1 percent in October, due largely to falling energy prices, and that annual inflation now stands at 3.6 percent, down from a three-year high of 3.9 percent in September.

source

Inflation

source

source

CPI and COLAs

The BLS reported this morning: "The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 4.1 percent over the last 12 months to an index level of 222.686 (1982-84=100)."CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). Here is an explanation ...The calculation dates have changed over time (see Cost-of-Living Adjustments), but the current calculation uses the average CPI-W for the three months in Q3 (July, August, September) and compares to the average for the highest previous average of Q3 months. Note: this is not the headline CPI-U, and not seasonally adjusted.

source

CPI: 3.6 Annual Rate

The Labor Department reported that consumer prices surged 0.5 percent last month paced by higher energy costs and overall prices are now 3.6 percent higher than a year ago.

source

Consumer Price Index: 3.6% Annual

The Labor Department reported that consumer prices fell in June for the first time in a year, down 0.2 percent last month due to tumbling gasoline and heating oil prices, but annual inflation rose from 3.4 percent to 3.6 percent.

source

CPI: 2.7%

Over the last three months, inflation has been running at an annualized rate of 6.0 percent and, going back six months, the rate of inflation has been 5.6 percent. Moreover, as indicated in red above, another few months like the last ones will result in replacing price declines in early-2010 that could push the consumer price index sharply higher.

source

New CPI Index

The “F” in CPI-F stands for “flat” and this index is calculated by taking the overall consumer price index and excluding more items from it, much in the same way that food and energy have been excluded from “core” inflation, the preferred measure amongst Fed economists. For CPI-F, those items that are increasing in price at a rate of more than 1.5 percent would be excluded … along with those items that are increasing in price at a rate of less than 1.5 percent and items whose prices are falling. The index currently stands at 1.5 percent. source

Inflation

source

CPI and PCE

source

CPI Categories

source

Consumer Price Index July 2010

The Labor Department reported that the rising cost of energy products pushed consumer prices 0.3 percent higher in July following three straight months of modest declines, most recently a dip of 0.1 percent in June.

With all of the big year-over-year energy price increases now wrung out of the system, the annual rate of inflation now stands at 1.3 percent, up from 1.1 percent a month ago. Last month, energy prices rose 2.6 percent and are now 5.2 percent higher than a year ago.

The price at the pump rose 4.6 percent in July, more than offsetting the decline in June, and, for the third consecutive month, food prices were flat.

source

June 2010: Consumer Price Index

source

Stamp Prices v. CPI

source

Consumer Price Index

source

My thoughts: So much for deflation, here comes double digit inflation.

Minimum Wage to Decline

Colorado will become the first state to reduce its minimum wage because of a falling cost of living.

The state Department of Labor and Employment ordered the wage down to $7.24 from $7.28. That's lower than the federal minimum wage of $7.25, so most minimum wage workers would lose only 3 cents an hour.

Colorado is one of 10 states where the minimum wage is tied to inflation. The indexing is thought to protect low-wage workers from having flat wages as the cost of living goes up.

But because Colorado's provision allows wage declines, the minimum wage will drop because of a falling consumer price index. It will be the first decrease in any state since the federal minimum wage law was passed in 1938.

"We can't see that there would be any other option" except lowering the wage, department spokesman Bill Thoennes said Tuesday. He said there will still be a public hearing on the question in early November, though the drop appears inevitable. The lower wage will take effect Jan. 1.

Advocacy groups for the poor have been warning of the wage drop since August, when the consumer price index for the Denver area was released. The index fell 0.6 percent between the middle of 2008 and the middle of 2009, mostly as a result of falling fuel prices.

Other states with adjustable minimum wages have seen their consumer price indexes fall, such as Ohio. But Colorado is one of the few states where the law is interpreted to mean the wage can fall. Other states are planning to keep wages flat.

read the entire article

Deflation?

source

A key index of prices paid by consumers showed the largest year-over-year decline since April 1950, primarily due to sinking energy prices, the government said Wednesday.

The Consumer Price Index, the Labor Department's key measure of inflation, has fallen 1.3% over the past year.

That's the largest decline in nearly 60 years, and is due mainly to a 27.3% decline in the energy index.

On a monthly basis, CPI rose 0.1% in May, after remaining flat the previous month. Economists surveyed by Briefing.com expected a 0.3% increase.

from CNN

My thoughts: Double digit inflation will shock people who were not paying attention as the Fed ran the printing presses at full speed.

Consumer Price Index

source

Deflation: Don't Panic

Yes, we need to get "inflation back into the system", but lets do it in a way that will cause another giant asset bubble to form without causing inflation to "runaway".

That really worked out well last time.

Get ready for all kinds of crazy-talk this spring - heaven help us if the annual change in the CPI dips below minus one percent, or minus two percent...

Yes, people saving money is a bad thing - they must be compelled to "shift out of cash". We need another bubble to rescue us from the fallout of the last two.

from The Mess That Greenspan Made

My thoughts: After the media whips up the deflation panic, we can expect 15% inflation by 2011.

Consumer Price Index

The Labor Department reported that consumer prices fell 0.7 percent last month but rose 0.1 percent during all of 2008. As is the custom, the monthly figures use seasonally adjusted data while the annual inflation rate gets the non-seasonally adjusted variety.

source