Economic Charts

All economic charts are at the bottom of the page.

Friday, October 15, 2010

Monthly Consumer Price Inflation

I normally don't post the Government released figures for CPI, as I feel that it has been changed too much over the years (with hedonics and etc) that it doesn't actually reflect true consumer price inflation.  As it does have some value as to how cost of living increases (COLA) come into play for Social Security (hence why it isn't the real number, it is kept artificially low to keep the COLA low).

CPI is the change in the price of goods and services purchased by consumer. Core CPI is the change in the price of goods and services purchased by consumers, excluding food and energy.  The forecast for CPI was a 0.2% increase, but the actual headline number is 0.1% (we know this isn't right given the recent hikes in food and gas).  The forecast for Core CPI was 0.1%, but the actual headline number came in at 0%.  Both were seen as a disappointment as the Fed wants a certain amount of inflation to occur.  Historically this has been an indicator for our currency, as higher inflation rates meant that the Fed would soon hike interest rates, thereby strengthening the currency.
We are not referring to historic norms anymore.  The Fed is trying to weaken the currency by having higher inflation and wants a lower inflation number so that he can keep Social Security COLA.  Why would you want higher inflation and a lower interest rate, it devalues your currency and if you devalue your currency, then in real dollar value terms you owe less on your debt than you otherwise would.  It also boosts exports helping your GDP look better in dollar terms.  This is all fakery anymore, as all countries are in a race to the bottom with their currencies and the people of those countries are the ones that get hurt.  If you really want to know what the inflation rate is, refer to's inflation graph which I post at the bottom and will post here.

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