click for ginormous chart
fredgraph CPI food
Source: FRED


This morning’s column on Inflation truthers led to some emailers insisting inflation numbers are much higher post crisis than pre.

Sorry, but the data says that is simply not true.

Play with the attached FRED XL spread sheets all you want, the data is hard to argue with. (Same goes for energy, especially Oil), Cherry pick whatever time period you want. Tweaj the charts on FRED.

From 2000 to the end of 2008, Food at home averaged 3.00% year over year increases; since 2009 until today, its only been 1.78%.

With Oil, its much more dramatic: Oil averaged 24.9% year over year price increases from 2000 to 2008; Since 2009, its averaged a far more tame 6.5%.


Inflation Food at home FRED

inflation Oil FRED


Category: Data Analysis, Inflation, Mathematics

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.

16 Responses to “Inflation Was Much Higher Pre-Crisis than Post-Crisis”

  1. chartist says:

    Just observing the chart, it looks like inflation has averaged 2.5% annually since 2000. I believe that our government is understating inflation. In the end, some part of the economy suffers. They may say food and energy don’t count as they’re too volatile, but the purchasing power of Americans is suffering and they can’t stop eating.

    • willid3 says:

      and most of the reason for lost purchasing power is because of the lowering wages. cause if you incomes dont go up, but prices go up some, you have lost ground.

  2. CD4P says:

    I was in an electronics store today and was very surprised to see how far the big screen LED TVs have come down in price.

    On the other hand, look at all the bidding chasing sports franchises. $2 billion for the Clippers?!? The Clippers? Most folks would’ve thought that price would be for the multi-champion Lakers.

  3. sellstop says:

    Price after price has gone up over the last year. And if the container doesn’t cost more it is because the container is smaller and the price is the same.
    And forgive us for being sensitive to prices. Of beer, gas, meat, cereal, etc. Our wages have not kept up. Who has gotten a raise lately?
    Not the working man or woman.

    • winstongator says:

      Were you complaining about inflation in 2006?

      • Liquidity Trader says:

        I think what BR is saying is that he was complaining about inflation when it was much higher. These hypocrites ignored the 2000s inflation and are now complaining about lower levels of inflation.

      • winstongator says:

        I should have used more than one line – my comment was to @sellstop. I get Barry’s message. My tag at the end is ‘why are you so much more concerned about inflation now than in 2005-2007?’.

    • wally says:

      “And forgive us for being sensitive to prices. Of beer, gas, meat, cereal, etc. Our wages have not kept up.?

      Exactly… what you see is a chart of price increases, not inflation. From about 2000 to 2008 oil prices steadily rose, and are a component of almost every product. Also, Chinese labor has gotten more expensive. So prices we pay for “stuff” have gone up, but not necessarily what we pay for US labor. Offsetting this is increased robotization, which makes some “stuff” incredibly cheap… but which concentrates the profits from that stuff in the hands of fewer individuals.

  4. Moss says:

    It is very very difficult for some to be objective about economic data when ideology and politics are in the frontal lobes. These built in biases have been the thing to fade for the last 5 years.

  5. SumDumGuy says:

    The other problem is that the human brain is pretty awful at remembering inflation on a year-by-year basis. Sure, we remember when a typical container of ice cream was a half gallon versus the 1.5 qts nowadays, but then we’ll attribute that to happening more recently… i.e. last year, rather than the 4+ years that it happened.

    Oh, and anecdotal evidence for sure, but my company has been doling out steady raises over the past 3-4 years, so it’s not everyone.

  6. ch says:

    Two questions:

    1. If oil prices rose 24% per yr pre-crisis and 6.5% per year post crisis, why are oil price increases deemed “transient” by the Fed? It seems they’ve only gone in one direction (up) for a time frame equal to 15% of the lifespan of the Fed.

    2. Why is healthcare 17% of US GDP yet only account for 7% of US CPI?

    ADMIN: CPI measures CHANGES in price, no TOTAL price.

    • willid3 says:

      the reason oil prices are considered ‘transient’ is that one week they might go up .10, the next week they might go up .30. and they do go down to the same degree. but they do tend to have a upward tilt over all. and there is a political, business or fiscal reason for why its not considered too. its one way to control the cost of social security, it also controls the cost of labor. as many labor contracts calculate the cost of living raises based on the CPI. course that was when we had lots of labor unions. and oddly enough most economists dont consider inflation to be a problem, until wages go up. wonder why that is

  7. Todd says:

    Yes, but volatility is greater in the latter 3% with 1.73 Std dev vs. 1.78% and 2.3 std dev. It’s the volatility that’s remembered. It’s the greater change that registers in our monkey brains.

  8. Livermore Shimervore says:

    How is this even up for debate? When incomes are not rising but lend-to-securitize mania takes over the entire U.S economy people will consume more, spend more and pay more for everything.

    • willid3 says:

      except we have cut back a lot on that lend-to-securitize scheme from the 2000s. since easy credit is pretty dried up now.

      but its the low incomes that continue from the 2000 – today that continue.