Reclaiming Common Sense

The June Consumer Price Index, or CPI, was published today and reported a rate of 2.9%. Was it that level? There are non-seasonally adjusted components and seasonal adjusted components. Once again we saw Service Inflation and Commodity deflation. Once again we saw Medical inflation, Energy Inflation, and Shelter Inflation.

The weighting does not make sense. The weighting on Health insure is up from 1.001% of spending to 1.049%. If you spent $40 a month last June then you spent $42 this June - that is an increase of 5%. Supposedly the inflation was only 0.5%, one tenth the growth that was impacted by how we "spent" our money. DI d we spend $37 a month less on Shelter of $45.75 more on Shelter? Did we spend $9.80 more on Household furnishings and supplies or $1.51 less during this June compared to last June?

Net- Net we have inflation. Wages are growing faster than the official inflation rate, so we should be able to weather this storm.

It's the Economy.

We saw Commodity Deflation and Service Inflation, Again.  Energy costs were up 12%. Household Operations were up 6.2%. Hospital and related services were up 4.5%. Transportation Service were up 3.7%. Water and Trash Services were up 3.5%. Personal Care service were up 3.4%. Household furnishings were down 1.2%. Education and Communication Commodities were down 2.4%. Recreational Commodities were down 3.2%.  Shelter was up 3.4%.