Another Ron Griess special, via The Chart Store

Given last week’s relatively benign PPI, lets look at the components feeding into CPI:


Category: Inflation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

17 Responses to “CPI Annual Rate of Change”

  1. tagyoureit says:

    If Healthcare bill fails, do you think we’ll see Medical Care deflation? Is that the next shoe to drop? Excerpt below seems a bit exagerated to me (millions giving up meds, really?)

    Everything I read about new jobs is focused almost entirely in Healthcare.

    From Yahoo Finance:

    “Healthcare. A forced reduction in healthcare coverage is probably one of the most crushing effects of a weak economy, as the unemployed and others without insurance make drastic trade-offs to cut costs and get by. Millions of Americans are forgoing doctor visits, abandoning medication, ignoring problems, and simply hoping they don’t get seriously ill or hurt. “I don’t go to the doctor as often,” says Debby Abrams. “Aches and pains work themselves out. I have some neurological thing going on in my left thumb right now, but I’m going to ignore it and attribute it to aging rather than go to a neurologist.”

  2. jpm says:

    Housing at -0.28%. Right.

  3. dsdonaghy says:

    So here’s one for the pit bulls out there. My company is about to go through its annual reviews of employees, and I am well aware that they are going to try and justify a 2% pay increase across the board, and use CPI as their justification for doing so. I can already tell you that I’m not settling for 2% – heck, that doesn’t even match the “All items” rate. I also believe that one of the largest components of CPI is the OER index, which has been dying and dragging the rest down. Problem is, I don’t know the percentage of CPI that housing encompasses.

    Any of the fine readers here care to help me scuttle this and aid me in some talking points? I’d be ever appreciative

  4. Thats annualized percentage change

    Considering existing home sales rose vs one year ago, it is in the ballpark

  5. John Purcell says:

    I can’t believe how partisan this chart is!!! My reasoning:

    1. The MACD of the weekly close on the S&P might be interesting to look at for a variety of reasons.
    2. Barry and Ron Greiss are bad people, so anything they say is invalid.

    Just kidding…what’s a comment thread without some straw man and ad hominem action!

  6. jpm says:

    BR: Perhaps I was too quick to judge. CPI-housing is tied to house sales, like your link? or does rent also play a role? (Rents are dropping precipitously on the coasts, but I’m less sure about flyoverville.)

  7. jpm says:

    As I think about it, I probably need more coffee before interpreting “annualized percentage change”. I normally would have guessed that means 0.28% ^(1/12) = effectively flat. But if it it is implying 0.28% ^12 = about 3.4%, then at least it causes me less heart burn.

    Oh well, back to 8th grade and word problems for me. I hope I get some hot chicks in class.

  8. Dogfish says:


    Doesn’t sound that exaggerated to me, if you mean the forgoing medical care and medicine… After being laid off twice in downsizing moves the past two years I dropped my health insurance to save some money month-to-month (My salary going from 52 to 35 after finding employment again). A few months ago I got diagnosed with diverticulosis… 4 days in the hospital, NO surgery, just rest and recuperation: $15,000.

    The doctors would not allow me to leave and just lay in my bed taking antibiotics, which would’ve been just as effective and saved me about $12,000. At least the let me refuse the wheelchair… which apparently they require all checkouts to be wheeled out in a chair by a nurse, regardless of what they were there for, or even if they (like me) can walk (or run) perfectly fine. They even wanted to keep me a few extra days (more money for them), but I made it a point to walk around annoying the nurses so much that they finally agreed I could go home.

    I assumed this was so they could put another charge against the health insurance, and they let me go without it since I didn’t have insurance. Struck me as there being a competition between hospitals and health insurance as to who could charge the other the most, which the patient being stuck in the middle without much recourse.

    I need surgery for my diverticulosis and I have a feeling I need a root canal (constant toothache and slightly loose tooth for a few months now), but all of that is put on hold due to lack of money and lack of insurance. I’m getting insurance soon, but mostly for future protection against a similar situation as none of my current situation will be covered by it for a year or so.

    This may be going a bit far for some random blog post, but it’s almost getting to the point where not taking care of any of it and letting the chips fall where they may (probable death as there is a small chance bowel cancer is involved) is the most rational choice considering the impact that continued life will have (financially and emotionally) on my friends and family. I am 31 years old.

    If I may drop a profanity here, it’s a fucking shame that our country is skewed so heavily towards giving those with the most even more, while us here in the middle class get thrown crumbs and told to be grateful for it.

    It’s also a fucking shame that some of the most important aspects of all of our lives… health, education, defense.. are more and more moving to be purely profit-driven enterprises with the lowest possible level of service for the highest possible price.

    All these self-professed christians who run our country need to re-align themselves with their holy book and wonder if lately they’ve been worshipping the wrong spelling of “Prophet”.

  9. Dogfish says:

    I should also add that I didn’t go to the hospital until after a week of intense pain at home, where I was trying to self-medicate to save money, and just telling myself it’s a real bad stomach flu. Another day or two and I probably would’ve died from sepsis as one of the diverticula had ruptured.

    But whatever. I just wanted to throw all this out there because the above example that tagyoureit posted is not as exagerrated as some may believe. People are struggling with life and death decisions brought about by those sitting at the top whose biggest concerns are how to get re-elected and which golf course their lobbyist should buy them a round at.

  10. Mannwich says:

    Sorry to hear that, Dogfish. False “prophets” are everywhere these days, but none more so than the holy “market”. We all bow down to it now.

  11. Mannwich says:

    @Dogfish: And as someone who has a similar chronic illness through no fault of my own, I can relate. I’m actually at the point where my primary motivation for living as heathily as possible and going to the gym as much as possible is out of spite to our current health “care” system. I don’t want to give that rotten system a nickel more than I have to in order to survive. Funny, I feel the same way about our banking system as well.

  12. the bohemian says:


    thanks for sharing dude

  13. ashpelham2 says:

    Dogfish, you are a great case of the tough decisions that people have to make in the “new normal”. I am like many of you, I don’t like paying taxes. But we all have to realize that we will either pay the taxes to the federal government or we will pay them to the hospitals, private road engineering firms, or what-have you. There are services that must be provided if we want to have a developed, progressive society. I look at countries that have neglected infrastructure and social programs. Poor countries. Haiti is a sad but easy example. Cuba, Cyprus, many, many others.

    I spend a lot of time watching what I eat, exercising, and loving life, for the same reasons others here do. I want to be healthy and fit on my own. I do have excellent health insurance, but we pay dearly for it. For those who cannot afford it, there should be some basic care provided. But the rest of us that either have great insurance or have the ability to pay otherwise might see better care. I am bitter deep inside because of the for-profit nature of EVERYTHING now. There’s just nowhere you can go that the bottom line isn’t important. Even at my Methodist church. It can’t be avoided.

    We are looking at the demise and end-days of an empire.

  14. rootless_cosmopolitan says:

    @Barry Ritholtz (and jpm):

    “Thats annualized percentage change”

    The graph says “Annual rate of change”, though. “Annual” and “annualized” are two different things.

    “Considering existing home sales rose vs one year ago, it is in the ballpark”

    The “Housing” component of the CPI does not include prices for home sales. See here:

    It includes rents, instead. Rents have decreased over the year.


  15. rootless_cosmopolitan says:

    Although looking at the detailed data in the table for Dec 2009, it appears the decrease in the “Housing” component over the year doesn’t come from rent or owners equivalent rent, it comes from “Lodging away from home”, “Fuels and utilities”, and “Household furnishings and operations”, instead.


  16. Housing component is Owners Equivalent Rent (OER) which we have spilled quite a few pixels on over the years.

    Suffice it to say it is not very accurate

  17. tagyoureit says:

    @ Dogfish

    Thank you for your insight and sharing. I am sorry you’ve suffered so, truly.

    I agree with you in that our system is imperfect and it’s a shame when people knowingly and willingly exploit those flaws out of fear and greed. I could go on and on, but no need for me to spout off my half-baked philosophy. I guess what I mean is, I sympathize with your (understandibly justified) outrage, but I don’t think ‘the system’ is evil or ‘bad’, rather just more than a few ‘actors’.

    Bottom line, you’re still with us, so I take that to mean you haven’t given up hope yet. Hang in there and get well!


    I noticed on another post that Heathcare is on a 30 win streak, that’s quite a record. I can’t help but think all great champions eventually fall.