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US consumer prices tick up just 0.1 percent last month despite big gain in energy costs
Associated Press ^ | 20 Feb 14 | CHRISTOPHER S. RUGABER

Posted on 02/20/2014 8:11:42 AM PST by xzins

U.S. consumer prices barely rose last month as a sharp increase in energy costs was offset by cheaper clothing, cars and air fares. The figures indicate inflation remains mild.

The Labor Department said Thursday that the consumer price index rose just 0.1 percent in January, down from a 0.2 percent gain in December. Prices have risen 1.6 percent in the past 12 months. Excluding the volatile food and energy categories, core prices also rose just 0.1 percent last month and 1.6 percent in the past year.

The year-over-year increase in core prices was the smallest in seven months.

The "mild uptick ... confirms the fact that inflationary pressures remain well contained," Martin Schwerdtfeger, an economist at TD Bank, said in a note to clients.

(Excerpt) Read more at newser.com ...


TOPICS: Front Page News; News/Current Events
KEYWORDS: bs; cpi; finglie; inflation
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1 posted on 02/20/2014 8:11:42 AM PST by xzins
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To: All

Diesel is out of sight, propane has rocketed, gasoline up solidly, food is much higher than being admitted to due to comparing airline prices, automobile prices, and clothing prices in the market basket.

Any dolt knows joe sixpack doesn’t fly a lot, that he doesn’t buy a car all that often, and that winter clothes are now on sale (so are cars and tickets...winter sales.)

So, because something I don’t buy has gone down, and something that I absolutely must have and must buy has risen dramatically, then that means that prices aren’t changing for the worse.

Can anyone say: “discouraged workers” “dropping out of the labor force” “U3” and “manipulation of numbers”?


2 posted on 02/20/2014 8:12:02 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: xzins

I guess everything’s alright as long as you have money for new clothes, cars and travel. A lot of people don’t.


3 posted on 02/20/2014 8:15:12 AM PST by virgil
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To: xzins

The books are on fire.. they are no longer just cooking them.


4 posted on 02/20/2014 8:15:33 AM PST by cableguymn (It's time for a second political party.)
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To: xzins

Hooray, I bought some socks.


5 posted on 02/20/2014 8:17:37 AM PST by Starstruck (If my reply offends, you probably don't understand sarcasm or criticism...or do.)
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To: cableguymn

I’m guessing that if we were using the same formulas for inflation and unemployment that were used in Jimmy Carter’s presidency, that the misery index would be comparable.

Add to it the lower wages of the middle class versus when Obama took office, and even their irrational inflation numbers says the middle class is being taken to the cleaners.

And Obama loves his idea of the “chained CPI.” IOW, if beef goes up, but chicken is cheaper, then beef can’t be part of the inflation equation. You’ve gotta go with the cheaper meat. How long ‘til it goes all the way to roadkill?


6 posted on 02/20/2014 8:19:59 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: Starstruck

I got some bacon. We could have a party.


7 posted on 02/20/2014 8:23:18 AM PST by TurboZamboni (Marx smelled bad and lived with his parents .)
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To: xzins

What’s wrong with the government’s inflation calculations? You can’t eat $10 DVD players from China...


8 posted on 02/20/2014 8:36:47 AM PST by CitizenUSA (Sodomy and abortion: the only constitutional rights cherished by Democrats.)
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To: xzins
The "mild uptick ... confirms the fact that inflationary pressures remain well contained," Martin Schwerdtfeger, an economist a propagandist at TD Bank, said in a note to clients marks.

Rejoice comrades, the chocolate ration this month has increased from 25 to 20 grams.

9 posted on 02/20/2014 8:37:24 AM PST by ChildOfThe60s ((If you can remember the 60s.....you weren't really there)
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To: xzins

And I have a bridge for sale.


10 posted on 02/20/2014 8:40:50 AM PST by woodenickel
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To: xzins
While most Americans prefer lower prices, economists warn that super-low inflation may slow economic growth. It can lead consumers to postpone purchases and makes inflation-adjusted interest rates higher, potentially discouraging borrowing.

Absolute NewSpeak goobley gook.

As usual, Americans are stupid for wanting lower prices, when our betters in Washington know what we really need is inflation to encourage us to borrow to buy what we can't afford.

11 posted on 02/20/2014 8:41:44 AM PST by ChildOfThe60s ((If you can remember the 60s.....you weren't really there)
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To: xzins

Our government is no longer capable of telling the truth... bread and circus... the emperor must keep the masses tranquil.


12 posted on 02/20/2014 8:51:33 AM PST by LibLieSlayer (FROM MY COLD, DEAD HANDS! BETTER DEAD THAN RED!)
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To: xzins
IOW, if beef goes up, but chicken is cheaper, then beef can’t be part of the inflation equation.

That's not the way it works.

13 posted on 02/20/2014 8:58:49 AM PST by 1rudeboy
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To: xzins

I look at my sixteen dollar package of ground beef, and I laugh.


14 posted on 02/20/2014 9:00:55 AM PST by Buckeye McFrog
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To: xzins

These numbers have been managed since LBJ. The idea is that is inflation is managed low, net GDP is higher than it really is.


15 posted on 02/20/2014 9:09:52 AM PST by Sam Gamgee (May God have mercy upon my enemies, because I won't. - Patton)
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To: CitizenUSA

Precisely. Not to mention that a DVD player that was once made in Japan has a major quality difference over it now being made in China.


16 posted on 02/20/2014 9:10:56 AM PST by Sam Gamgee (May God have mercy upon my enemies, because I won't. - Patton)
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To: FReepers

Click The Pic To Donate

Support The Resistance, Donate Monthly If You Can

17 posted on 02/20/2014 9:19:45 AM PST by DJ MacWoW (The Fed Gov is not one ring to rule them all)
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To: xzins

obviously the US government just can’t bring itself to telling the truth to the people all across this country just effed they really are. Not to worry, the people will catch on one of these days.


18 posted on 02/20/2014 9:20:38 AM PST by drypowder
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To: TurboZamboni

And I bought a new skillet the other day. Let’s rock!


19 posted on 02/20/2014 9:29:37 AM PST by sheana
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To: xzins

Our government doesn’t figure food or energy into it’s inflation calculations so they are basically worthless.


20 posted on 02/20/2014 9:42:39 AM PST by fella ("As it was before Noah so shall it be again,")
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Comment #21 Removed by Moderator

To: xzins
Excluding the volatile food and energy categories...

In other words excluding the stuff everyone needs everyday.

22 posted on 02/20/2014 9:56:56 AM PST by Flick Lives ("I can't believe it's not Fascism!")
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To: fella

Why count those?
We all gots EBT , right?


23 posted on 02/20/2014 10:35:35 AM PST by TurboZamboni (Marx smelled bad and lived with his parents .)
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To: xzins

First, trust nothing from this administration.

Second, the CPI is a farce so laughable it is not to be taken seriously.

A box of granola bars use to have 6 bars, now 5.
Items that came in one pound bags now have 14 ounces.
Ice cream was 1/2 gallon.
Everything on the sorecshelves come in bigger boxes with less product while the CPI still counts it per box.

Real inflation since zero is at least 25% higher now than 2008.


24 posted on 02/20/2014 10:57:04 AM PST by Organic Panic
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To: Para-Ord.45; Flick Lives

The current cpi is designed purely to prevent politicians and the fed from looking bad. The same with unemployment stats. In fact, I seriously doubt there’s an honest government stat that is turned out at any point by any deptmt or agency in the entire US government.


25 posted on 02/20/2014 10:58:56 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: Organic Panic

Excellent point.


26 posted on 02/20/2014 10:59:51 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: xzins

Uhhhh.....if people can’t afford clothing, cars and air fares, how does them costing less keep inflation low?


27 posted on 02/20/2014 11:01:23 AM PST by grania
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To: TurboZamboni

Whoa. You can afford bacon?

Party’s at your house!


28 posted on 02/20/2014 11:04:05 AM PST by Black Agnes
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To: grania

Using their ridiculous point, if Ferari had a sale last month that dropped their cars down to an average of 100 grand, how does that help the price of chuck roast that’s gone from 2.89 a pound to 4.89 a pound in 2 years. I saw it at Wal-Mart a few weeks ago at 6.39 a pound. Chuck roast....ALWAYS considered a low cost, undesirable cut.


29 posted on 02/20/2014 11:05:41 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: xzins

How about food prices? You can’t eat consumer durables or autos.


30 posted on 02/20/2014 11:06:47 AM PST by 1010RD (First, Do No Harm)
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To: Organic Panic
The CPI is not calculated my package size. A dozen eggs is a dozen eggs. Shrinking the package size to 11 has no effect on the way the government calculates the number. It has an effect on you which is why it makes people confused.
31 posted on 02/20/2014 11:08:57 AM PST by 1rudeboy
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To: 1010RD

As I understand it, food is “volatile”, so they don’t count food in the new improved cpi with the weight it used to have.

In the meantime, food has doubled, but it doesn’t get counted, and as Organic Panic has pointed out, the government counts “packages” for so many items, and the manufacturers make the packages smaller but keep the price the same. IIRC, I had to get a bag of sugar recently, and the old 5 pounder is now a 4 pounder....but, I’m just a tin foil whiner, that’s not a price increase. /sarc


32 posted on 02/20/2014 11:10:34 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: 1010RD; Organic Panic

As I understand it, food is “volatile”, so they don’t count food in the new improved cpi with the weight it used to have.

In the meantime, food has doubled, but it doesn’t get counted, and as Organic Panic has pointed out, the government counts “packages” for so many items, and the manufacturers make the packages smaller but keep the price the same. IIRC, I had to get a bag of sugar recently, and the old 5 pounder is now a 4 pounder....but, I’m just a tin foil whiner, that’s not a price increase. /sarc


33 posted on 02/20/2014 11:10:48 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: xzins
When the cost of food rises, does the CPI assume that consumers switch to less desired foods, such as substituting hamburger for steak?

No. In January 1999, the BLS began using a geometric mean formula in the CPI that reflects the fact that consumers shift their purchases toward products that have fallen in relative price. Some critics charge that by reflecting consumer substitution the BLS is subtracting from the CPI a certain amount of inflation that consumers can "live with" by reducing their standard of living. This is incorrect: the CPI's objective is to calculate the change in the amount consumers need to spend to maintain a constant level of satisfaction.

Specifically, in constructing the "headline" CPI-U and CPI-W, the BLS is not assuming that consumers substitute hamburgers for steak. Substitution is only assumed to occur within basic CPI index categories, such as among types of ground beef in Chicago. Hamburger and steak are in different CPI item categories, so no substitution between them is built into the CPI-U or CPI-W.

Furthermore, the CPI doesn't implicitly assume that consumers always substitute toward the less desirable good. Within the beef steaks item category, for example, the assumption is that consumers on average would move up from flank steak to filet mignon if the price of flank steak rose by a greater amount (or fell by less) than filet mignon prices. If both types of beef steak rose in price by the same amount, the geometric mean would assume no substitution.

Bureau of Labor Statisics.

As for the Ferrari example? It's so dumb I can't wrap my mind around it.
34 posted on 02/20/2014 11:13:52 AM PST by 1rudeboy
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To: xzins
...the government counts “packages” for so many items, and the manufacturers make the packages smaller but keep the price the same. IIRC, I had to get a bag of sugar recently, and the old 5 pounder is now a 4 pounder....but, I’m just a tin foil whiner, that’s not a price increase.

Incorrect.

35 posted on 02/20/2014 11:15:10 AM PST by 1rudeboy
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To: Black Agnes

My bacon is only when on sale with a coupon


36 posted on 02/20/2014 11:22:19 AM PST by TurboZamboni (Marx smelled bad and lived with his parents .)
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To: Organic Panic

I suspect that the unit pricing history is available for all of those products and more in the computers of the retailers. Somebody should do a study of a typical grocery cart of items and show the unit price increase over the last 6 years.


37 posted on 02/20/2014 11:25:33 AM PST by AJFavish (www.allanfavish.com)
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To: 1rudeboy

Unfair to seniors, military retirees, etc. What is hard to understand about the example of an expensive car going down, when the article is about the CPI dropping because deals on air travel, autos, and clothing? Did you read the article?

***By Emma Margolin
hardball

updated 4/6/2013 9:17:48 AM ET
Print
Font:

President Obama’s controversial budget proposal uses a formula called “chained CPI.” Here’s what you need to know about how it’s calculated, and how it may affect you.

And you thought the term “sequestration” was bad…

Details of President Obama’s proposed budget leaked on Friday, signaling his intention to cut Social Security and other benefit programs by way of a revised inflation adjustment known as “chained CPI.”

The proposed budget–expected to be released next week–enraged many on the left, who felt Obama had betrayed “the core of the progressive and Democratic legacy,” said Stephanie Taylor, co-founder of the Progressive Change Campaign Committee, in a statement on Friday. Critics on the right were also angered by the rumored cuts, which House Speaker John Boehner belittled as, well, too little. “If the president believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes,” he said in statement released Friday. “That’s no way to lead and move the country forward.”

But while many commentators were busy being outraged, others were merely confused. So for those of you wondering, “What the heck is ‘chained CPI,’ and why is everyone so mad about it?” here are some FAQs.

What is the CPI?

The consumer price index, or CPI, is a formula that measures the prices of goods and services we buy and how they change over time. These good and services include everything with a price tag, like food, housing, and clothing. The CPI is used to calculate cost-of-living adjustments–COLA–which affect how much money you receive from programs like Social Security. When cost-of-living-adjustments go up, you get a bigger check from the federal government.

How is that different from “chained CPI?”

The chained CPI slows the growth of entitlement programs by assuming that when prices go up for something, people switch to cheaper substitutes. That is, if the price of steak goes up, people will skip the steak and buy chicken instead. And if people aren’t necessarily paying more for their goods, they don’t need their benefits to rise. Estimates show that under the chained CPI, your cost-of-living adjustment would be about .3 percentage points below the plain CPI, which means you won’t see as big an increase in your Social Security check.

Can I see an example?

Sure. Let’s say your monthly Social Security check last year was $2,000. Using the CPI, the Social Security Administration found that the cost of living adjustment for this year was 1.7 percent. To calculate your new social security check, you take last year’s check and multiply it by your cost of living adjustment (COLA) for this year. You then add the result to last year’s check to get the new number. So here we go: 2,000 x .017 = 34. Using the CPI, your monthly Social Security check would have increased from $2,000 to $2,034.

Using the chained CPI, your COLA comes out to .3 percentage points lower–so instead of 1.7 percent, it’s now 1.4. 2,000 X .014 = 28. Your monthly Social Security check is now $2,028–$72 less a year than you would be getting using the plain CPI formula. Sounds tiny? The switch could save $130 billion.

What are the drawbacks?

Pay attention: this is the key part. Some analysts fear the chained CPI switch unfairly burdens seniors, who tend to have more health care needs–which, unlike food or clothing choices, are not “elastic.” If you need blood-pressure medication, you still need it even if (or when) the price rises. You can’t simply choose to have a different medical condition that happens to be cheaper to treat. And if you’re not free to substitute chicken for steak, the fundamental economic assumption that drives the chained CPI no longer applies. “Seniors have a different consumption basket from the young, one that includes more medical expenses, and [they] probably face true inflation that’s higher, not lower, than the official measure,” wrotePaul Krugman in The New York Times Friday. “This is, purely and simply, a benefit cut.”***


38 posted on 02/20/2014 11:33:32 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: xzins
As far as I can tell you are comparing apples and oranges (with some BS about Ferraris, to boot).

From a scientific perspective, it is not wise to complain about how the "CPI" is calculated by complaining about how the "chained CPI" is calculated.

39 posted on 02/20/2014 11:39:46 AM PST by 1rudeboy
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To: 1rudeboy

The chained cpi was part of a side discussion. The Ferrari is about the article itself. Have you read the article?


40 posted on 02/20/2014 11:48:47 AM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: TurboZamboni

I see you’re in MN. Can you afford to cook the bacon you found on sale? What with propane costs and this insane winter?


41 posted on 02/20/2014 11:55:47 AM PST by Black Agnes
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To: Black Agnes
I'm not on propane. I have natural gas.

Especially after eating bacon.

42 posted on 02/20/2014 11:58:03 AM PST by TurboZamboni (Marx smelled bad and lived with his parents .)
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To: TurboZamboni

LOL.

Hey, at least you don’t have to rely on a solar cooker up there.


43 posted on 02/20/2014 11:59:08 AM PST by Black Agnes
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To: xzins
Ok, let's back up. Your comment:

In the meantime, food has doubled, but it doesn’t get counted, and as Organic Panic has pointed out, the government counts “packages” for so many items, and the manufacturers make the packages smaller but keep the price the same. IIRC, I had to get a bag of sugar recently, and the old 5 pounder is now a 4 pounder....but, I’m just a tin foil whiner, that’s not a price increase. /sarc

fundamentally is incorrect.
44 posted on 02/20/2014 12:04:37 PM PST by 1rudeboy
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To: 1rudeboy

Are you saying that chuck roast wasn’t 2.89 and now is 4.89 2 short years later? Are you saying that the 5 pound bag wasn’t smaller?


45 posted on 02/20/2014 12:07:26 PM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: xzins
What I'm saying is, is that a pound of meat is a pound of meat, and a dozen eggs is a dozen eggs with regard to the calculation of the CPI.

You are saying that a producer shrinking the size of its package affects the above, and that is incorrect. Just as the assertion that consumers substituting chicken for beef when beef gets too expensive affects the calculation of the CPI is incorrect.

46 posted on 02/20/2014 12:12:20 PM PST by 1rudeboy
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To: 1rudeboy

We’re talking meat and eggs when organic panic was talking packaged items like ice cream.


47 posted on 02/20/2014 12:25:24 PM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: xzins

And that comment fundamentally was incorrect, also . . . just as your comment was.


48 posted on 02/20/2014 12:27:55 PM PST by 1rudeboy
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To: 1rudeboy

Did you have a favorite?


49 posted on 02/20/2014 12:31:01 PM PST by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: xzins
Definitely. Yours.

Dense. Like a neutron star.

50 posted on 02/20/2014 12:32:12 PM PST by 1rudeboy
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