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...]
Understanding Inflation and What to Do About It
Inflation erodes our purchasing power causing manufacturers to have to raise prices or reduce quantities in order to make the same profit margin. Neither consumers nor manufacturers benefit, so who does? Why is inflation so prevalent? Yes, the level of inflation will vary and may recede briefly but the erosion continues. To say that low inflation is better than high inflation is like saying a death of a 1000 cuts is preferable to beheading. Either way you are dead, one just takes longer. With low inflation however you may not notice the cuts since they are so small. Unfortunately, just because the government says the cuts are small doesn't mean that they actually are. See Can We Trust … [Read more...]
What Causes Unemployment?
I recently received the following question about unemployment from a gentleman in Tanzania and I thought it was a good question and I would share the answer with you. What Causes Unemployment? I have been thinking on that situation of unemployment. Why does the rate of unemployment increase day after day? Does it mean that people have decreased the rate of thinking on creating jobs or there is any other reason? ~ Lioba from Dar-es-Salaam Tanzania. Here is my Response: Lioba, That is a very good question. Unemployment is a function of how efficient the marketplace is. In a purely agricultural economy, there is no unemployment, everyone has to work, if they don't work they don't eat. … [Read more...]
The Language of Inflation
Just the other day I was thinking about language and how it molds our thought processes. In some aboriginal tribes they don't have words for past, present and future tense. They would just say "I go home" this could mean "I went home", "I am going home" or "I will go home". It has been proven that in societies like this the concept of time is very muddled if almost non-existent. How can you plan for your future if you don't understand the concept of time? Lest we English speakers get all smug about the superiority of our language, ancient Greek was more precise than English in many aspects such as the word Love with at least three different words that we translate as "Love". And Eskimos are … [Read more...]
A Monetary Master Explains Inflation
Today we'd like to host a discussion between Terry Coxon, a senior editor of The Casey Report and David Galland, a partner in a research firm employing about 40 analysts. David says... Terry is my go-to guy. He cut his teeth working side by side for years with the late Harry Browne, the economist and prolific author of a number of groundbreaking books, including the 1970 classic, How You Can Profit from the Coming Devaluation. The timing of Harry's book should catch your eye, because his analysis that the dollar was headed for a big fall was spot on. Anyone paying attention made a lot of money. As coeditors of Harry Browne's Special Reports, Terry and Harry made a formidable team for … [Read more...]
