If you Spent $4000 Last April - It would cost you $4100 or $4200 this April. What difference does it make? If you spent the money the exact same way this year as last year- the same importance - it would cost you 2.5% more. If you spent last year's $4000 the way that they say you spent it this April it cost you $4200. How do you stretch $4000 to $4200. Inflation is either 2.15% or 5.52%. Talk about going off the charts.Medical care services that cost you $35 during April last year cost you $268 this April. Education and Communication Services that cost you $152 last April cost you $247 this April. Anyone considering Cord Cutting? We have to compare apples to apples, oranges to oranges, and health care costs to health care costs for the same month.
It's the economy.
For every dollar you spent last April it costs you a $1.07 this April. The weighting does not compute. There are "always" rounding errors in the data. The dollar for dollar comparison is often off my a few cents. They computed the $1 spending at $0.9351 for 2015 and $0.92742 for 2016. That zoomed to $0.9923 this April. You needed $1.07 to spend a dollar you spent last year. There were some "savings" this year regarding "Commodities." Services Soared. Supposedly we are only allocating $1 out of every $100 on insurance. We were allocating $2.49 per $100 on insurance last year. Remember that Health Insurance Costs spiked during October. How are we allocating less this April than last April.
Are you spending Eight Times as much on Medical Care Services this year? The weighting for 2015 and 2016 was 84.9 cents per hundred dollars on medical care services - now you are spending $6.69 per hundred on medical care services. Is this a typo? Should it have been 0.669? Health Insurance Relative Importance a typo, too? Education and Health Services?
Was Inflation 2.15%, 3.5% or 6.1%? Typos in the Report?
The monthly CPI report is important in order to understand why you do or do not have more money in your pocket at the end of the month. The CPI is a basket of goods and services that is re-weighted every month and every year for the same month. This column has written numerous articles detailing the "true" rate of inflation (or deflation) that we have experienced. We know that there is medical insurance inflation and medical care and commodity inflation. Two months ago this column asked the question "what would happen if the inflation rate exceeded 3.0%? This month the data is really skewed.
The Inflation rate is over 2% for all items, non-seasonally adjusted. The two percent inflation rate is the "target" rate of the Federal Reserve. The non-seasonally adjusted data is what consumers experience. Seasonally adjusted data is what the government pushes. Yes, we can change our habits when the price of blueberries skyrockets during the Winter and tumbles during the Spring and Summer. The thing is that there are some things that we cannot avoid: Shelter Costs, Health Insurance Costs, and the "volatile" energy cost. That "Gasoline Stimulus" before the election is gone.
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