Headline Nov CPI rose .1% (expectations up .2%) as did the core rate (in line). The y/o/y gain is up 1.1% and the core is up .8%. Benign inflation right? Not. The absolute CPI price index (aka cost of living) is now at the 2nd highest reading on record at 218.88 seasonally adjusted, just a hair off the all time high of 219.10. The core rate, which the Fed loves to focus on, is at an all time record high. The Fed said this yesterday, “measures of underlying inflation are somewhat low…” The rate of change may square with this but the absolute level certainly does not. Sorry for the digression from the details of the report but this talk of deflation and Fed actions in response doesn’t square with the reality that we experience everyday in what we purchase. OER and vehicle prices kept a lid on the figures and commodity prices rose just .1%.

Category: MacroNotes

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.

9 Responses to “Benign inflation? Not as I see it”

  1. foosion says:

    Please tell me this is a joke.

    We have a very low rate of inflation. That means prices are rising very slowly.

    Failure to hit a record high in absolute level just about every period is sign of deflation (or flat prices). Frequently hitting a record high is what you’d expect, even with very low inflation.

    The absolute level is the sum of all prior changes. Any inflation makes it go up.

  2. [...] Benign Inflation?  Not As I See It  (TBP) Tweet [...]

  3. [...] Boockvar says official inflation statistics showing little in the way of price pressures are masking real cost-of-living data increases. Sorry for the digression from the details of the report but this talk of deflation and Fed actions [...]

  4. JesseLivermore says:

    You made this same, retarded point two months ago. http://www.ritholtz.com/blog/2010/10/inflationdeflation-in-context/
    Seriously, your posts on inflation are so bad that they literally make your readers dumber.

  5. snapwizard says:

    Are any of the above who commented serious?

    The point here is fed’s obsession with deflation when the inflation data does not square with it. Please!

  6. Jojo says:

    Dateline 2012 – For the 6th straight month the government reported 0% inflation as the price of the basket of goods used to track inflation (a bag of potting soil from Walgreens), remained unchanged in price.

  7. ashpelham2 says:

    Jojo….That’s very funny. The bag of potting soil…….What is being REPORTED and what is actually being observed is what the point of the post is. I’m not seeing deflation in anything I need. It’s rapid inflation in fact. But the food/energy component is cut out, so it seems inline.

    The real story is what did inflation do versus wages?

  8. gman says:

    ” just a hair off the all time high of 219.10″ and if the economy were healthy and had trendline inflation that metric SHOULD be @ 235!

    “I’m not seeing deflation in anything I need.”
    Too bad you dont “need” housing or to hire people…massive deflation there..and huge part of any real metric of price in a economy.

  9. boveri says:

    As I see it Barry is ready to go off the deep end on inflation as he did with Fraudclosuregate. Sure it’s a hair off the all-time high of 219.10 but that was set back in July 2008, which tells you that inflation hasn’t gone anywhere in the past 2 1/2 YEARS!