US Cost of living hits an all time record in February as the Fed closes its eyes to any signs of inflation


An index created by the DOL to measure the actual cost of living hit a record high in Feb, surpassing the old high in July 2008. The Chained CPI, increased 0.5% percent to 127.4, from 126.8 in Jan, for a YOY increase of 2%. In July 2008, just as the housing crisis was tightening its grip, the Chained Consumer Price Index hit its previous record of 126.9.  Via CNBC:

“The Federal Reserve continues to focus on the rate of change in inflation,” said Peter Bookvar, equity strategist at Miller Tabak. “Sure, it’s moving at a slower pace, but the absolute cost of living is now back at a record high in a country that has seven million less jobs.”

The regular CPI, which has already been at a record for a while, increased 0.5 percent, the fastest pace in 1-1/2 years. However, the Fed’s preferred measure, CPI excluding food and energy, increased by just 0.2 percent.

“This speaks to the need for the Fed to include food and energy when they look at inflation rather than regard them as transient costs,” said Stephen Weiss of Short Hills Capital. “Perhaps the best way to look at this is to calculate a moving average over a certain period of time in order to smooth out the peaks and valleys.”

Data via BLS:

Feb 2011 Unadjusted % change    YOY       MOM                   
All items....................   2.0       0.5 
  Food and beverages..........  2.2       0.4 
   Food.......................  2.2       0.4 
    Food at home..............  2.8       0.5 
    Food away from home.......  1.6       0.2 
   Alcoholic beverages........  1.4       0.4   
Housing.....................    0.5       0.3 
   Shelter....................  0.7       0.2 
   Fuels and utilities........  1.8       0.7 
   Household furnishings...... -2.3       0.2 
  Apparel..................... -0.7       1.5 
  Transportation..............  7.4       1.1 
   Private transportation.....  7.3       1.0 
   Public transportation......  9.7       2.2 
  Medical care................  2.7       0.8 
   Medical care commodities...  2.5       0.7 
   Medical care services......  2.7       0.8 
  Recreation.................. -0.9       0.4 
  Education and communication.  0.8       0.0 
   Education..................  4.0       0.0 
   Communication.............. -1.7       0.0 
  Other goods and services....  1.6       0.2 
Commodity and service group
Services.....................  1.3       0.3 
 Commodities..................  3.0       0.8 
  Durables.................... -1.1       0.5 
 Nondurables..................  4.4       0.9 
  All items less food/energy..  0.9       0.4 
 Energy.......................  10.9      1.6 

Comments

Popular posts from this blog

October retail sales come in strong, especially auto sales

Tea Party Buffalo Pictures

How to spot a fake Tea Partier