The devil is in the seasonal factors. The government quotes seasonally adjusted data reflexively. We experience seasonal fluctuations in price so seasonally adjusted data makes sense when comparing one month top the next, literally. We should be experiencing the same seasonal effects during the same month from year to year. Some years the heating bills will be higher during one January compared to the prior year. That money can be spent elsewhere. The same could be said for food or water and sewer costs. The seasonal factors change from month to month, season to season, and year to year. Inflation differs between categories. The problem is that the authors of the report re-weight everything.

We saw Energy Spike During January - compared to last month and Last January. Energy costs spike 3.3% from December 2016 and 10.8% compared to last January. This is not being readily reported. We also saw another 4.8%spike in health insurance costs, according to the authors of the report, compared to last January's level, which was a 4.8% jump from January 2015. Medical care commodities spiked 4.7% from last January. Medical Care services spiked 3.6%. Shelter jumped 3.5%. This is a trend that has been observed for months and years.

The January Inflation number, the Consumer Price Index, was released with little fanfare. The data that was released showed the largest spike in month to month, seasonally adjusted, inflation during the past 13 months with a reported value of 0.6%. The official annual rate of inflation was reported at  2.5% for "all items." That rate of inflation has been surging since July 2016. The federal reserve has set an "ideal rate of inflation" of 2.0%. The problem that we are seeing is that the "gasoline savings" that used to be reported has been replaced by a "gasoline deficit" as gasoline prices have started rising during the past year. We continue to see medical inflation. We continue to see shelter inflation.

If you feel like you are spending more money than last year, you are. When examining the inflation data this column attempts to literally compare apples to apples. Supposedly we spent 13 dollars less on food this January compared to last January and we "saved" 21 dollars compared to January 2015. We continue to spend less on Household furnishings compared to 2015 and 2016. We are spending less on recreation. We continue to see shelter inflation. Where we were spending $1308 a month for shelter during January 2015 and $1326 during January 2016, we are now spending $1346 a month on shelter. We spent $21 more on Medical Care services this month compared to January 2015. Health insurance has supposedly spiked from $32 a month during January 2015 to $40 a month during January 2017. Eight dollars is an increase of 25% over two years. I do not know where anybody is paying $40 a month for health insurance.

Supposedly we are only paying $4 more for the same services this January compared to last January. The problem is that we are also spending virtually all of our money on these items. If we have $4000 a month to spend on the same items we purchased last year, instead of have $26 dollars left over at the end of the month we need an additional $105 to buy the same things. Did you receive a 2.5% pay raise over the past year?

It's the Economy.

P.S. They revised the seasonally adjusted data was revised.... shocker.

 Reclaiming Common Sense