Europe is Teetering on the Edge of “Japan-Style” Deflation


Europe: The ONE Economic Comparison That Must Not Be Named... Was Just Named The Continent is now teetering on the edge of a "Japan-style" deflation. Here's our take on it. By Elliott Wave International It's happened. The one economic comparison Europe has dreaded more than any other; the name that's akin to Lord Voldemort for investors has been uttered: "deflation." And it's not just "deflation." You can still spin that term in a positive light if you get creative enough. Say, for example, "Falling prices during deflation actually encourage consumers to spend." But once you add the following two very distinct words, there's no way to turn that frown upside down. And those words … [Read more...]

Inflation Falls 3rd Straight Month

MIP-Reality 9-17-14

The Bureau of Labor Statistics (BLS) released the August inflation numbers today and for the third straight month inflation is lower. The annual inflation rate for the 12 months ending in May was 2.13%. The June inflation numbers were 2.07%. In July inflation fell to 1.99% and in August it was down to 1.70%. As the inflation rate falls this is "disinflation"  on an annual basis although July and August were "deflationary" on a monthly basis, i.e. each monthly number was below zero at -0.04% and -0.17% respectively. Our Moore Inflation Predictor (MIP) is generally quite accurate. Last month the MIP forecast a slight decrease in inflation for August but we actually got a bit larger 14.5% … [Read more...]

BLS Releases July Inflation Numbers

Aug 2014 Gasoline Prices

The U.S. Bureau of Labor Statistics released their inflation numbers for July on August 19th. The basic summary they emailed read as follows: CPI for all items rises 0.1% in July as food prices rise but energy prices decline 08/19/2014 On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers increased 0.1 percent in July after rising 0.3 percent in June. The index for all items less food and energy rose 0.1 percent in July, the same increase as in June. If you just read that what impression would you get? Maybe that inflation is UP?  At least that is what the headline implies. But then it says, energy prices are down. And it also implies … [Read more...]

Inflation Flat in June

AAA June Gasoline Prices

The Bureau of Labor Statistics released their Consumer Price Index (CPI) for June of 2014 on July 22nd. Based on the rounded numbers this would result in an Annual Inflation Rate of 2.1% the same as last month (May). But here at Inflation Data we look at it to two decimal places and based on that we can see that in May the rate was actually 2.13% and in June it fell ever-so-slightly to 2.07%. Many will say that it isn't statistically significant and it quite possibly isn't but it is quite possible that inflation is heading down again. Time will tell. I find it interesting that both the WSJ and Reuters top articles on inflation today say inflation is "Up"  WSJ:Spike in Gas Costs Pushes Up … [Read more...]

Japanese Inflation Higher than U.S- First Time Since 1978

US vs Japan inflation

Core inflation in Japan was 3.4% in May while U.S. inflation was officially,  only 2.13%. This was the fastest rise in Japanese prices since April 1982. In the 1970's inflation was bad in the U.S., but it was much worse in Japan. Every rise in U.S. inflation was multiplied in Japan, for instance, the average annual U.S. inflation rate, in 1974, was 11.04% while in Japan it was more than twice as high at 23.10%. But in 1978 a strange thing happened, Japan got its inflation under control and Japanese inflation dropped down to 4.2% while U.S. inflation remained at 7.59%. And by1979, Japanese inflation had fallen to 3.8% while U.S. inflation climbed to 11.35%. In 1980, although Japan had a … [Read more...]

US Consumer Prices Rose 0.4% in May to 2.13%


The U.S. Bureau of Labor Statistics released the Consumer Price Index (CPI) for the month of May today,  at 237.900 it was up sharply from April's 237.072. This resulted in monthly inflation increasing 0.35% from April to May. Thus the annual inflation rate jumped from 1.95% in April to 2.13% in May. Key gainers on a monthly basis were fruits and vegetables which gained 1.4% over the month and account for 1.352% of the total CPI index . Airfares were up a whopping 7.4% as the summer season got under way which accounts for 0.77% of the total CPI. The other major gainer was electricity which increased 4.1% and accounts for 2.832% of the index. Meats, poultry, fish, and eggs were also up … [Read more...]

Various Methods of Calculating Inflation

Federal Reserve Bank of Cleveland

Why are There So Many Different Ways to Calculate Inflation? We've all heard the old saying, "Figures don't lie but liars figure"  or perhaps "You can make numbers say anything you want".  Both of these sayings contain the underlying assumption  (or at least possibility) of malicious intent. But even if you have the raw data and  just want to get at the truth, number calculations can present difficulties because the answer you get can depend on how you analyze it. For instance, you would think that if you want to know the "average" income of a group of 10 people it would be easy to calculate. And if all the incomes are relatively closely grouped it is easy... simply add them all up and … [Read more...]

April Inflation Up Sharply as Projected

The current CPI for the month of April was 237.072 which resulted in monthly inflation being up 0.33% in the month of April causing the annual inflation rate to jump from 1.51% up to 1.95%. Last month we told you to be aware that this month's jump would be seen as a possible return to inflation and of course the main stream media and even some of our competitors fell right into that trap. USInflationCalculator for instance quoted the Wall Street Journal as saying, "Inflation may be normalizing a bit faster than we thought," the Wall Street Journal quoted Laura Rosner, U.S. economist at BNP Paribas. "It’s still too early to assume this will persist, but it certainly raises the risks of … [Read more...]

Monthly Inflation Jumps for March 2014


The current CPI for the month of March was 236.293 which resulted in monthly inflation being up 0.64% in the month of March causing the Annual inflation rate to rebound from 1.13% up to 1.51% nearly reaching January's 1.58%. And the Moore Inflation Predictor's inflation forecast is for another huge jump this month taking the inflation rate to over 2%. In other news: We are in the process of upgrading and redesigning the site in an effort to make it easier to use and as my webmaster says "more responsive" which means that if you have a tablet or even a smart phone you should be able to read it easier. If you are on a full sized screen and want to see what happens you can drag the side of … [Read more...]

Why the Fed Does Not Control Inflation and Deflation

Commodities Approaching 3 Year Low

Although we may not always agree with Steve Hochberg's conclusions the following video contains some very thought provoking ideas accompanied by some charts that you probably haven't seen anywhere else.  It's interesting to note the quadrupling of the FED's leverage over the years since 2008 and the amazing lack of inflation associated with it. Check out this excellent six-minute video clip by Elliott Wave International's Steve Hochberg... at the Orlando Money Show. Despite the Fed's leverage and its attempt to inflate throughout the economy, the deflationary pressures in the U.S. are overwhelming. Gain an Advantage Over 99% of U.S. Investors - in Just 15 MinutesYou can … [Read more...]