The U.S. Bureau of Labor Statistics released their monthly Consumer Price Index (CPI) data on Friday January 16th for December and for the first time since 2009 reported annual inflation below 1% (although we calculated October 2013 at 0.96%). The Consumer Price Index (CPI) for December was 234.812 down from November’s 236.151 which was also down from 237.433 for October. This resulted in a monthly decrease in prices of -0.57% and an annual inflation rate of 0.76%. Overall energy on a “seasonally adjusted” basis was down -4.7% for the month and -10.6% on an unadjusted basis for the entire year. Fuel oil fell -7.8% for the month (adjusted) and a whopping -19.1% annually. Gasoline was … [Read more...]
Inflation Flat for October
The Bureau of Labor Statistics released the Inflation rate for the month of October today. Annual inflation remained steady at 1.66% even though prices fell from the month previous (i.e. monthly inflation was -0.25%). However, since monthly inflation was -0.26% in October 2013 annual inflation rates remained virtually identical as October 2013 was replaced by October 2014 in the calculations. The FED has stated that it's goal is to maintain inflation at a steady 2%. But as we can see from the chart they have rarely achieved that goal. If the goal was to remain below 2% we could say they have done very well since 2012 however during that time-period the FED has been fearing deflation … [Read more...]
Inflation or Deflation? – Yes
Over the years we've published a variety of articles on the inherent "tug-of-war" between inflationary and deflationary forces in the world including How can we have Inflation and Deflation at the same time? and Battle of the 'Flations both from back in 2008 and Deflation or Inflation - Which is it? in 2009 and Which is Stronger- Inflation or Deflation? in 2010. Another recurring theme has been Velocity of Money and Money Multiplier- Why Deflation is Possible and today John Mauldin will take a stab at each these critical topics once again. Understanding their interrelationships will greatly help you understand the monetary forces at work.~ Tim McMahon, editor The Flat Debt Society By … [Read more...]
Where is Gold Headed?
To get the true measure of anything it is important that you use a standardized measurement. This of course is why a "foot" or "inch" eventually became exactly a certain length and didn't vary based on each particular person doing the measuring. And more recently it is why Celsius measurement relates to the exact freezing and boiling points of water at an exact atmospheric pressure. It is also why, when we measure a commodity like Gold or the stock market we need to use a scale that doesn't change. Unfortunately, the typical measurement i.e. the U.S. dollar is always changing in value. That is the dollar depreciates due to inflation thus changing the measurement on a daily (or at least … [Read more...]
Inflation Flat in June 2014
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...]
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...]
Is the Federal Reserve Right About Inflation?
The Federal Reserve The Federal Reserve serves as the Central Bank of the United States, and whether you realize it or not, it plays an active role in the lives of every American. It makes decisions about monetary policy and interest rates that have a direct impact on the market and an indirect impact on everyone. The FED uses inflation targets to determine how much they can devalue (inflate) the currency. Many people believe that they created a massive money printing scheme cryptically called "Quantitative Easing"since QE1 converted almost worthless mortgage backed securities into currency. The Fed regularly issues statements about how inflation isn't really as bad as everyone says it … [Read more...]
Inflation was Up Slightly in January 2014
Current Inflation Commentary- The U.S. Bureau of Labor Statistics has released the Annual Inflation rate today. For the year ending in January, inflation was 1.58% up very slightly from 1.50% for the year ending in December 2013. Annual inflation is made up of 12 monthly inflation components and although monthly inflation was virtually Zero for December 2013 and rose to 0.37% in January. This fits well with the historical trend of low inflation in the 4th quarter and high inflation in the first quarter of the year. The Consumer Price Index came in at 233.916 in January which was actually … [Read more...]
Lawsuit Settlement Inflation
Our society is becoming increasingly litigious with people suing for almost anything. And lawsuit amounts have skyrocketed over the last 50 years. One typical example is in the asbestos litigation category. Although, asbestos use was halted in the 1970s, due to the long period before symptoms of asbestos damage shows up, asbestos related lawsuits are still prevalent. In the United States, approximately 600,000 people have filed suits claiming damages caused by asbestos, and asbestos litigation has become the largest mass tort in history. Despite the decline in the number of people diagnosed with asbestos related diseases (such as mesothelioma cancer) since the 1990s, asbestos litigation … [Read more...]
Inflation Expectations and the FED
As inflation expectations rise the FED has less and less "wiggle room" to stimulate the economy. But how do you measure "inflation expectations"? In today's article, Chris Ciovacco will show us. ~Tim McMahon, editor Low Inflation Leaves Fed’s No Taper Door Open Fed Lost Control In 2008 In early December, we used Japan as an extreme example of why central banks are terrified of allowing their respective economies to slip into a deflationary spiral. Do the same concepts apply to the United States? They do. The federal government offers standard Treasury bonds (IEF) and Treasuries that provide some protection against inflation (TIP). The law of supply and demand tells us that when demand … [Read more...]
