Wednesday, November 18, 2009

 

Just in Case You Missed It Yesterday: CNBC Considers 3.7% Annualized Inflation "Tame"

I won't bore you with the full analysis, since it's virtually the same as for yesterday's PPI figures.

So the quick version: The CNBC main page blurb says "Housing Starts Drop; Inflation Tame," yet the actual story is that (seasonally adjusted) CPI rose 0.3% from September to October.

So with rounding, that's an annualized increase of 3.7%. Is that really "tame"? And for the record, during the ten months from December 2008 to October 2009, the unadjusted CPI rose 2.8%, which translates to an annualized 3.4% inflation rate. Again, I'm not saying it's time to get out the wheelbarrows for your daily wages, but at what point are people going to stop saying we're on the edge of a deflationary cliff? If 3.4% (annualized) year-to-date inflation is tame, at what inflation rate is Bernanke going to say, "OK now we need to start doing something about rising prices"?



Comments:
Notice the sharp rise in prices of used cars.
 
Funny, Krugman assured us all not to worry on Monday.
 
O/T: Psst, Bob! I can't access my email during the day, so if you have any follow-up questions to the ultra-helpful email I sent you this morning, and want the answers soon, ask them here if you wish.
 
Use the The CPI calculation used in 1980, the Annual inflation has not dropped below 5% since 1987.
 
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