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

[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.

[1rudeboy]

I can see you enjoyed it, so here's some more from the link. Again, please pay close attention to how food and energy are ignored.

Consumer Price Index Data for January 2014

Food

The food index rose 0.1 percent in January. The food at home index increased 0.1 percent, with the major grocery store food group indexes mixed. Three of the six increased, including the indexes for cereals and bakery products and for dairy and related products, which both rose 0.5 percent. The index for meats, poultry, fish, and eggs also increased, rising 0.4 percent. In contrast, the fruits and vegetables index declined in January, falling 0.3 percent, while the index for nonalcoholic beverages fell 0.2 percent. The index for other food at home was unchanged in January. The food index has risen 1.1 percent over the past year, with the food at home index up 0.5 percent. The index for meats, poultry, fish, and eggs has risen 3.3 percent over the last 12 months. The index for cereals and bakery products has also risen over that span, but the other major grocery store food group indexes have declined. The index for food away from home rose 0.1 percent in January and has increased 2.0 percent over the last 12 months.

Energy

The energy index rose 0.6 percent in January as a decline in the gasoline index was more than offset by increases in household energy components. The electricity index rose 1.8 percent, its largest increase since March 2010. The index for natural gas also rose sharply, increasing 3.6 percent, and the fuel oil index increased 3.7 percent. The gasoline index, which rose in December, fell 1.0 percent in January. (Before seasonal adjustment, gasoline prices rose 1.4 percent in January.) The energy index has increased 2.1 percent over the last year, with all major components posting increases, though the gasoline index has increased only 0.1 percent.

[xzins]

You seem like a good egg, rudeboy, but you do make me laugh. I’ll check out your thread and will be open to learning. Thanks.

[Toddsterpatriot]

Link?

[1rudeboy]

You seem like a good egg, rudeboy....

NOW IT'S PERSONAL!!!

[xzins]

Another thing they lack is transparency about adjustments made for quality. Monthly they might try to be fair, but every 3-5 years or so, they redesign their market basket based on what’s currently being purchased and how.

[xzins]

I wasn’t referring to a market basket egg. :>)

[xzins]

http://www.federalreserve.gov/faqs/economy_14419.htm

Last paragraph that begins “Finally,...”

[hadaclueonce]

You seem like a good egg, rudeboy.... NOW IT'S PERSONAL!!!

I hate it when families fight. a piece of advise, keep your shirts on, take your shirt off and your going to jail.

[1rudeboy]

[Toddsterpatriot]

Thanks for the link.

Last paragraph that begins “Finally,...”

Doesn't prove your claim.

PCE uses core inflation that eliminates those areas they consider volatile.

Talks about additional measures.

[Toddsterpatriot]

LOL! Sox fans........

[xzins]

Although food and energy make up an important part of the budget for most households--and policymakers ultimately seek to stabilize overall consumer prices--core inflation measures that leave out items with volatile prices can be useful in assessing inflation trends.

I don't think you're paying sufficient attention to the above line from the final paragraph at the link.

It gives the Fed's preference.

[khelus]

Because his POINT had to do with substitution.

And, substitution is part of the calculation of the current CPI.

Not as much as the chained cpi, that democrats are begging Obama not to use, but [b]the current cpi formula includes the concept of substitution[/b].

It results in a lower cost than the older method.

Inflation, as calculated by the Fed, uses core inflation numbers, and it does exclude food and energy.

So, whichever way you turn, I get to smile.

You are correct. The chicken vs beef was an EXAMPLE of substitution in the report by the Boskin Commission, the purpose of which was to explore more sophisticated ways to decrease the CPI and COLA.

Chained dollars are in reality a method to incorporate substitution:

The difference between chained dollars and the previous measure, constant dollars, is that while the latter is weighted by a constant basket of goods and services, chained dollars are weighted by a basket that changes from year to year, i.e. incorporates substitution through the sophisticated use of weighting.

The Chained-CPI (C-CPI) is a fully-substitution-based version of the CPI-U, which is the primary inflation measure published by the U.S. government’s Bureau of Labor Statistics. The C-CPI is designed to reduce the level of reported inflation that otherwise would be used by individuals to make decisions tied to their investments and income. As a vehicle for artificially reducing COLA adjustments for such programs as Social Security, its proposed use here appears to be a rare area of agreement between both sides in the current budget-deficit negotiations.

[xzins]

its proposed use here appears to be a rare area of agreement between both sides in the current budget-deficit negotiations.

That's because it's so darn complicated, that they can show a formula, the sheeples' eyes will glaze over, and they'll succeed in lowering government spending on social security through subterfuge with no political price to pay.

That doesn't mean these creeps won't spend it elsewhere.

[khelus]

http://www.federalreserve.gov/faqs/economy_14419.htm

Last paragraph that begins “Finally,...”

Good link ! I'm adding it to my collection.

[RetiredArmy]

Yup, but CFC was different. I saw that deduction way way way way back and asked my sergeant about it and he told me what it was for and that it was automatic and that all soldiers had it took out. I never thought about it again. Didn’t have a problem with it. It was only like a buck.

[SisterK]

Oh I am happy: I saved lots of money on my monthly airfare and monthly new vehicle purchase. /s

[khelus]

its proposed use here appears to be a rare area of agreement between both sides in the current budget-deficit negotiations.

That's because it's so darn complicated, that they can show a formula, the sheeples' eyes will glaze over, and they'll succeed in lowering government spending on social security through subterfuge with no political price to pay.

That doesn't mean these creeps won't spend it elsewhere.

Yup... You probably have noticed that a lot of big government's so called transparency is hidden in plain sight.

[SisterK]

1rudeboy
as usual
someone is working real hard to live up to their name

[khelus]

Another thing they lack is transparency about adjustments made for quality. Monthly they might try to be fair, but every 3-5 years or so, they redesign their market basket based on what’s currently being purchased and how.

Worse yet is when they lower inflation by using a hedonics index or quality adjustment. The most infamous example is mandating an additive to gasoline. The additive increases the cost, but increase is subtracted when calculating the CPI using a 'quality adjustment'.