Friday, May 6, 2011

Yes, We Have No Inflation

Which of course means yes we do .  I don't need a degree in economics to know that the price of everything that matters has gone up, yet our government insists there is very little inflation and that the CPI (Consumer Price Index) reflects this lack of price increase.
Well I got sick of hearing this, and of hearing that that cost of of food and gas were not included in the the CPI because they were too volatile to give a true representation of what was going on.  Of all the things I have to buy food and gasoline are pretty much imperatives.  I decided to check and see what the CPI did measure and I learned that it monitors prices in urban areas only and what they monitor is this:

What goods and services does the CPI cover?
The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:
FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
APPAREL (men's shirts and sweaters, women's dresses, jewelry)
TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

What a strange list!  So they do track some food, but I can live without breakfast cereal, milk, wine, full service meals and snacks. What  I need is fresh produce and fruits that have gone up dramatically,  and eggs, flour  and rice all of which cost way more than they use to.  We won't talk about meat.
I love that they're tracking the cost of bedroom furniture, other than our bed we've had the same bedroom furniture since we were married.  It's couches, chairs, and tables I frequently have to replace. 
As to apparel, I own 1 dress and I've had it so long I can't remember when I bought it, but I do buy for my daughter and dress prices have doubled!
All of the transportation costs have gone up dramatically, have you bought an airline ticket lately?
All medical costs are up as is postage, telephone service, all pet items (our cat's food has gone from 28 cents a can to 47 cents), toys , eye glasses, in other words everything!

How can they say there is no inflation?  I can't figure it out.

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