3/01/2012

Inflation over 8 percent?

A lot of people aren't making really big home purchases right now. What happens to inflation when really big purchases are excluded? From CBS News:

Forget the modest 3.1 percent rise in the Consumer Price Index, the government's widely used measure of inflation. Everyday prices are up some 8 percent over the past year, according to the American Institute for Economic Research.

The not-for-profit research group measures inflation without looking at the big, one-time purchases that can skew the numbers. That means they don't look at the price of houses, furniture, appliances, cars, or computers. Instead, AIER focuses on Americans' typical daily purchases, such as food, gasoline, child care, prescription drugs, phone and television service, and other household products.

The institute contends that to get a good read on inflation's "sticker shock" effect, you must look at the cost of goods that the average household buys at least once a month and factor in only the kinds of expenses that are subject to change. That, too, eliminates the cost of housing because when you finance your home with a fixed-rate mortgage, that expense remains constant until you refinance or move. . . .

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1 Comments:

Blogger Rev. Paul said...

I'm sure that comes as a great surprise to the elected overlords in D.C. Everyone else already knew (or suspected) it.

3/01/2012 12:23 PM  

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