Reclaiming Common Sense

There were two economic reports released today. Instead of talking about an awesome Retail Sales Report and good CPI data we are hearing about alleged comments by President Trump in a private meeting on immigration and Nancy Pelosi's sexist and racist "Five White Guys" comment. The first report was the remarkable Retail Report that showed our economy was and is approaching a $6 trillion dollar retail economy for the first time. We also received the CPI report which is being ignored.

We saw Service Inflation and Commodity Deflation, again. This column has written numerous articles regarding Shelter inflation and Medical Care inflation. It has become even more evident that we are seeing Service inflation and Commodity Deflation. Shelter costs are up 3%. Hospital and related service are up 4.7%, Transportation services is up 3.7%, Recreation services is up 3.8%. Somehow there is no inflation for health insurance this year, again. It was recorded at zero last month, too.

It costs us $4064 this year for what cost us $3976 last year. There are two things to remember here: We "only have $4000 to spend" in this theoretical analysis. We did not have to spend $4000 last year - we had to spend $4064 this December.

Inflation Exists. The official rate of inflation was 2.1%. The real value is 2.2%. We have inflation and deflation. We "save" money in commodities and pay more for energy, shelter, and services.  What if nobody reports inflation? Does it really exist? Will we get some relief with bonuses and pay raises as a result of the tax reform that happened before the end of the year? Will anybody report it?

It's the economy.