Latest Consumer Price Data Ease Fears of Inflation
By JEREMY W. PETERS Published: December 16, 2006
The latest report on consumer prices showed that inflation was following an arc that must give some relief to the Federal Reserve.
Prices fell last month on everything from a gallon of gasoline to fresh vegetables and children’s clothing, helping to contain the overall rate of inflation at zero, the Labor Department reported yesterday.
Link
Arrrgggh! Wouldn’t you love to see the ‘source’ of these numbers? The question most must ask themselves after reading drivel like this is what planet do these economists come from and can we all live there?
Prices last month...how short do they think our memory is? Gas and food have continued their upward trend so are they talking wholesale prices here? Gas alone has gone up a quarter a gallon and food...the price of butter bounces up and down by fifty cents a pound depending on which side the store manager puts it in his pants that day!
Kids clothes...can’t comment there because I can’t afford them! My kids wear their cousin’s hand me downs.
Arrrgggh!
Sorry but my head is exploding!
The core inflation rate, a measure closely watched by the Fed because it excludes the volatile prices of food and energy, was also zero. [snip]
Wall Street also appeared to think so, and investors propelled shares to new highs yesterday. The benchmark Standard & Poor’s 500-stock index and the Dow Jones industrial average both closed at record levels. [snip]
On the one hand, the price deceleration has been broad-based. Just as the cost of gasoline was responsible for much of the run-up in prices earlier this year, falling fuel prices have brought down inflation. In addition, prices either fell or barely increased last month in most of the major categories that the government surveys for the consumer price index. Fruit and vegetable prices tumbled along with prices for airline tickets, automobiles and prescription drugs.
But the cost of housing climbed last month, reflecting the higher cost of natural gas and other utilities.
Need I point to the obvious good citizen...this article doesn’t provide a single shred of evidence. Read the whole thing, there isn’t a single link in it.
Even the bloviating economists cited in this piece offer no evidence, no proof to back up their assertions.
I just did my weekly march around the grocery store good citizen [because her majesty doesn’t ‘do’ groceries...or cook for that matter but I digress.] If fruit and vegetable prices are dropping it must be at the wholesale level because I didn’t find any ‘bargains’ or slashed prices in the produce department.
Here, at the end of this piece, we are offered an ‘alternative’ explanation that seems a bit closer to the mark:
Not all economists are convinced, however, that the recent rise in wages threatens to push inflation back up. Jared Bernstein, an economist at the Economic Policy Institute, said when inflation was not taken into account, wages had increased about the same year-over-year rate since this summer.
"Inflation hawks are always going to look to the phantom menace of labor costs," he said. "What real wage growth we’ve achieved has come from slower price growth. And that’s been a long time in coming. Don’t stop the party just when the working class gets there."
Lo and behold! Here we have contradictory evidence (with nothing to corroborate it, naturally) that our paychecks are not, as claimed, ‘outpacing’ inflation.
Moving on we have this interesting piece that shows us how misleading ‘raw’ data can be.
Who Americans Are and What They Do, in Census Data
By SAM ROBERTS Published: December 15, 2006
Americans drank more than 23 gallons of bottled water per person in 2004 — about 10 times as much as in 1980. We consumed more than twice as much high fructose corn syrup per person as in 1980 and remained the fattest inhabitants of the planet, although Mexicans, Australians, Greeks, New Zealanders and Britons are not too far behind.
At the same time, Americans spent more of their lives than ever — about eight-and-a-half hours a day — watching television, using computers, listening to the radio, going to the movies or reading.
Hmmn, guilty as charged as far as the computer or having my face stuck in a book goes but it seems they missed counting those who either have their ear glued to a cellphone or their fingers to a ‘crackberry’.
Don’t you just love that high fructose corn syrup...or could this be due more so to the fact that there are nearly twice as many of us as there was in 1980?
Then we have the ‘fat’ thing...according to the charts my ‘ideal’ weight is around 160 lbs...and I’m six feet tall. The last time I weighed 160 lbs I was 20 years old! Like a lot of ‘standards’, the height weight chart has been revised significantly downward over the past twenty years as [insurance companies] became more ‘health conscious’.
Yes good citizen, if you weigh more today than you did when you were twenty your insurance company thinks you’re fat.
Let’s take a look at some more interesting ‘statistics’:
More people are injured by wheelchairs than by lawnmowers, the abstract reports. Bicycles are involved in more accidents than any other consumer product, but beds rank a close second.
Most of the statistical tables, which come from a variety of government and other sources, are presented raw, without caveats; and because the abstract is so concrete, the statistics can suggest false precision. The table of consumer products involved in injuries does not explain, for example, that one reason nearly as many injuries involve beds as bicycles is that more people use beds.
And there you have it good citizen! Taken out of context you can find data to support even the most absurd assertions...like wages are outpacing inflation!
That said, some of the data shown was more sad than surprising...
With medical costs rising, more people said they pray for their health than invest in every form of alternative medicine or therapy combined, the abstract reports. [snip]
From 2000 to 2005, the number of manufacturing jobs declined nearly 18 percent. Virtually every job category registered decreases except pharmaceuticals. Employment in textile mills fell by 42 percent. [sad]
The job projected to grow the fastest by 2014 is home health aide. [really sad]
One thing Americans produce more of is solid waste — 4.4 pounds per day, up from 3.7 pounds in 1980. [not nearly surprising given how much ‘solid waste’ is passed off as the truth these days!] [snip]
That might help explain a shift in what college freshmen described as their primary personal objectives. In 1970, 79 percent said their goal was developing a meaningful philosophy of life. By 2005, 75 percent said their primary objective was to be financially very well off.
And that, good citizen is very sad indeed, especially when you consider that generation ‘A’ (adults in 1970) spawned generation ‘B’ (kids coming ‘of age’ today.)
Not only did ‘A’ fail to develop a ‘meaningful philosophy of life’ but they also failed to pass those values on to their kids!
I’ve had a few minutes to roll this conundrum over in my head and I hit upon something I’d like to share with you here.
I view this ‘shift’ in goals between generations as the confusing of the ‘means’ with the ‘ends’. Youth today (and it seems their parents along with them) confuse wealth with material comfort.
Picture if you will a cave filled with pirate treasure...gold, jewels and precious artifact fill the entire space, riches beyond your wildest dreams...now imagine that you are trapped in that cave.
The riches do you zero good.
Flip this situation around and imagine yourself as an ordinary member of society with a mundane job...you make an average income yet you want for nothing. Your home, your health, your future and your children’s future are safe and secure...not because you’re rich but because you’re a member of a society that puts material security ahead of financial security.
Isn’t that what we’re all after? The freedom from worry that material security brings?
Just saying, financial security is meaningless because the zeroes keep shifting and it only takes one slip to put you permanently out of the hunt. Material security has nothing to do with money...material security comes from the rules of society and the choices that society makes.
I find it more than a little disconcerting to see the pursuit of wealth as the foremost goal of those who obviously don’t know what wealth is...
I’ll leave you here to ponder this conundrum...
Thanks for letting me inside your head,
Gegner