Skip to comments.Since “Recovery Summer” of 2010, Prices Have Increased Faster Than Inflation (Except for Housing)
Posted on 10/29/2012 2:03:33 PM PDT by whitedog57
According to the National Bureau of Economic Research, the recent recession ended in June 2009. The American Recovery and Reinvestment Act of 2009 (aka, the fiscal stimulus bill) was passed by Congress and signed into law on February 17, 2009, by President Barack Obama for $831 billion. We know that unemployment is currently higher than the Administrations prediction of unemployment WITHOUT the stimulus.
Given over a year for the fiscal stimulus to kick-in, we see that the employment situation remains bleak. We know that more people have gone on disability than dropped off unemployment rolls since May 2010, the beginning of recovery summer.
With U6 unemployment remaining at 14.7%, the employment situation remains dismal even after the fiscal stimulus bill was passed.
But there was also monetary stimulus by the Federal Reserve in the form of QE1, QE2 and QE3. There are fears that the massive stimulus by The Fed would lead to rampant inflation, but the Consumer Price Index less food and energy has grown by only 4% since May 2010.
With the staggering stimulus we have seen a 50% decline in the 10 year Treasury rate since May 2010 and the stock market (as measured by the S&P 500 index) has increased 19% over the same period.
While investors have reason to be happy with both stock and bond market returns, consumers are less than happy. Gasoline has increased by 51% since May 2010 while meats, poultry, fish and eggs have grown by 12%. Finally, the Case Shiller 20 City home price index has fallen 4% since May 2010.
In a nutshell, gas, gold, stocks, bonds, medical care and food have ALL increased faster than the CPI less food and energy. In fact, food has grown 3 times faster than the CPI less food and energy.
(Excerpt) Read more at confoundedinterest.wordpress.com ...
Isn't that pretty much guaranteed if housing prices are dropping? Total inflation = housing inflation + non-housing inflation. If the housing inflation is negative, then the non-housing part will be greater than the total.
... and for packaged food, if the price didn’t go up, the quantity in the packaging went down.
When Obama was elected I use to buy a baked chicken for 4.99$. It is now 7.99$. That comes out to at least 12% inflation a year.