CPI update: Um, not so fast!

Friday, December 15, 2006 | 04:52 PM

Mhpa

Several readers (and Peter Bookvar) have suggested going to the Cleveland Fed CPI data:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (3.0% annualized rate) in November. The median CPI is a measure of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics’ (BLS) monthly CPI report.

Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers was unchanged in November. The CPI less food and energy remained largely steady (rose at a 0.6% annualized rate) on a seasonally adjusted basis.

Over the last 12 months, the median CPI rose 3.7%, the CPI 2.0%, and the CPI less food and energy 2.6%.
 


             
                                                                                                                                                                                                                                                                                                     
Percent Change From Previous     Month
JuneJulyAug.Sep.Oct.Nov.
CPI0.20.40.2-0.5-0.50.0
CPI less food & energy0.30.20.20.20.10.0
MEDIAN CPI0.40.40.30.30.30.2
Percent Change, Last 12     Months
JuneJulyAug.Sep.Oct.Nov.
CPI4.34.13.82.11.32.0
CPI less food & energy2.62.72.82.92.72.6
MEDIAN CPI*3.23.33.43.53.63.7
 
 

Now, I am not suggesting that this CPI measure is inherently better then that of BLS. But it certianly squares with reality a bit better than the NO INFLATION stuff of 8:30am . . .

Annualized Inflation Level

Jan-06  0.0021487  2.6
Feb-06  0.0028339  3.5
Mar-06  0.0040651  5.0
Apr-06  0.002715  3.3
May-06  0.0035353  4.3
Jun-06  0.0037249  4.6
Jul-06  0.0035618  4.4
Aug-06  0.0027895  3.4
Sep-06  0.0029203  3.6
Oct-06  0.0029925  3.7
Nov-06  0.0024863  3.0


Friday, December 15, 2006 | 04:52 PM | Permalink | Comments (14) | TrackBack (0)
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This gauge IS better than the core CPI because it does not automatically exclude food and energy prices to get at "core" or "underlying" inflation. The Cleveland Fed figures out the median price increase for many categories of goods and services. In this case, the median CPI also confirms a definite slowing in inflation in November. After rising by 0.3% or 0.4% for 9 straight months, we got a 0.2% gain in November. That's very good news.
It'd be good if folks focused on the Cleveland Fed's median CPI and the Dallas Fed's trimmed-mean PCE price index. They really are better.
And they are better than trying to rely on your own experience or anecdotal information. Go with the Force, Barry.

Posted by: rex | Dec 15, 2006 5:55:44 PM

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