The latest comments form Federal Reserve Bank of Kansas City President Thomas Hoenig also will be scrutinized, as he said late Tuesday that rising inflationary pressures are "troublesome" and a "serious" matter, and now stand at "unacceptably high levels." Hoenig isn't a voting member of the FOMC.
Let's take a look at some of the inflation measures to see how they're doing:
Although it has stabilized, PPI is still at high levels.
CPI has also stabilized, although at high levels as well.
Import prices are spiking. So long as oil is in a rally, expect this trend to continue.
And now for the Shadow Stats alternate CPI measures, just to show you that yes, there is probably more inflation in the system than the Fed wants to admit.
So - who is right? I'm not a statistician so I can't speak to the validity or non-validity of any of these numbers. However, I can tell you there has been a tremendous amount of debate about the US CPI calculation which leads me to believe there is a problem somewhere. However, where it is and to what degree it is impacting the current situation I don't know.
I will add my own observations. I have noticed big food price increases over the last few years. Nothing concrete -- no "prices have increased by x%" -- but I know my food bill is going up and my eating habits have not changed. FWIW.
2 comments:
There is an article in today's NY Times, entitled, "Seeing inflation only in prices that go up' that is definitely worth your reading consideration. The article makes an excellent contrarion case that it's not so much that food prices in particular are so high now, but that they were so cheap in the 1990's that the inflation in prices is very noticeable, even though as a share of the household budget, they are nowhere near a record. Very thought-provoking.
Don't fall for the propaganda ndd. The article makes a case for inflation not being that bad, but the numbers it cites show the exact opposite. A 20% drop in the price of apparel hardly compensates for a more than 20% rise in everything else. They mention the fact that the price of homes aren't used but that an "equivilent" rent is used. Creative accounting, no more no less. Check out www.shadowstats.com as to how the numbers are being rigged.
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