Friday, March 18, 2011

Great CPI Graph from WSJ


Great graph above that accompanies a story in today's WSJ on yesterday's CPI report.  The width of the bars represent the weights of different components in the CPI, and the height of the bars represent inflation rates (blue) or deflation rates (red) over the 12-month period ending in February 2011.  Obviously, gasoline prices have risen the most over the last year (almost 20%), but rent and the cost of home ownership have remained fairly flat, and some prices are showing deflation: phone services, video and audio, apparel and data technology.  


Interestingly, the CPI category "food at home" has gone up by 2.85% from Feb. 2009-Feb. 2010, but the category "food away from home" has only gone up by 1.56% over the same period.  Maybe that's because restaurants and fast food outlets have been reluctant to raise prices during what might be viewed as a "fragile recovery," and they have absorbed some of the wholesale food price increases.  Just one example: McDonald's still has maintained its Dollar Menu for the last several years without raising prices. 

16 Comments:

At 3/18/2011 1:40 PM, Blogger juandos said...

"fragile recovery"?!?!


New Housing Starts Lowest In 27 Years

 
At 3/18/2011 2:41 PM, Blogger Benjamin said...

Inflation-schmaflation.

Gasoline does what it does depending on the Mideast, not US monetary policy.

Food commodities are having a great year--but gluts will ensue.

Housing is weak, as my #1 Fan Juandos points out--Bernanke needs to pour it on, tip the barrels over, print until the plates melt. This is no time for the dithering, feeble policies of the Bank of Japan.

 
At 3/18/2011 3:28 PM, Blogger Paul said...

"Gasoline does what it does depending on the Mideast, not US monetary policy."

Gas also does what it does based on your boyfriend's energy policy.

 
At 3/18/2011 3:34 PM, Blogger Eric said...

"McDonald's still has maintained its Dollar Menu for the last several years without raising prices."

If only they maintained the size of the burger (and all those others ones not on the dollar menu) at the same time...

 
At 3/18/2011 4:25 PM, Blogger João Marcus said...

From a different perspective the graphs shown also indicate that Monetary Policy should not "meddle". "Inflation obsession" is bad for your health!
http://thefaintofheart.wordpress.com/2011/03/17/pictures-of-the-inflation-%e2%80%9cmenace%e2%80%9d/

 
At 3/18/2011 4:37 PM, Blogger happyjuggler0 said...

Maybe that's because restaurants and fast food outlets have been reluctant to raise prices during what might be viewed as a "fragile recovery," and they have absorbed some of the wholesale food price increases.

Actually a simpler explanation is that food cost is only a portion of their retail price. If the rest of their costs don't go up comensurately, then they can pass through 100% of their costs and their menu prices will still go up less than their food costs do.

 
At 3/18/2011 5:14 PM, Blogger Paul said...

Benji,

"Bernanke needs to pour it on, tip the barrels over, print until the plates melt."

If that's all it takes, why is there any poverty anywhere? Any idiot can turn on the money spigot.

 
At 3/18/2011 5:23 PM, Blogger Benjamin said...

Paul-

Your cruel taunts are undermining my self-esteem.

I have a different perspective than you. But why the personal animus?

 
At 3/18/2011 5:33 PM, Blogger Benjamin said...

Paul-
Your cruel barbs deflate me.

 
At 3/18/2011 9:28 PM, Blogger Paul said...

Benji,

I asked you a serious question, it also applies to Keynesian fiscal policy. Why is there poverty anywhere if all it takes is some easy peasy "stimulus" by running the printing presses, or by firehosing money at anything that moves or doesn't move.

Also, Rand Paul is pushing a 5 year plan to balance the budget. Are you going to get behind him, or is your love for your boyfriend too strong?

 
At 3/19/2011 1:10 PM, Blogger Benjamin said...

Paul-

I will brush aside your unnecessary cruel barbs and answer your question, although I have answered it before.

I do not believe in fiscal stimulus. I believe in monetary stimulus, as advocated by Milton Friedman.

I have already oisted many times my plan to get us to federal outlays at 16 percent of GDP: Eliminate USDA, Commerce, Education, Labor, HUD and cut Defense by 75 percent. Privatize the VA.

Cut Social Security outlays by 10percent, perhaps by an across the board cut.

Balance the federal budget by sending back to every state roughly what they send to DC in federal taxes.

There is nothing Keynesian about my plan, and it would eliminate many federal subsidies, and regional subsidization.

The R-Party and the Tea Party will never ever go for it, and the Dems won't either.

Okay, go back to your stinging and cruel barbs.

 
At 3/19/2011 7:43 PM, Blogger Paul said...

Benji,

"I will brush aside your unnecessary cruel barbs and answer your question, although I have answered it before."

And nowhere in your diatribe do you actually answer the question. Instead, you rattle off a laundry list of things the GOP would like to cut if they could get it by Harry Reid and your boyfriend.


"Eliminate USDA, Commerce, Education, Labor, HUD and cut Defense by 75 percent. Privatize the VA."

Rand Paul's plan does alot of that. Instead of supporting him, you'll be incessantly ranting about Kentucky's federal allotment disparity. Meanwhile, you'll be gearing up again to vote for your socialist boyfriend.

"Okay, go back to your stinging and cruel barbs."

And you, Benny The True Economic Conservative, go back to your lectures about you're the epitome of fiscal rectitude, and how we're all a bunch of fake conservatives/libertarians.

 
At 3/19/2011 8:42 PM, Blogger Ron H. said...

Benji

I am trying hard to understand your most recent response to Paul, and, like him, I'm searching in vain for the answer to his question. Perhaps it's the wording that's in my way. What do tou mean you have "oisted" many times your plan?

 
At 3/19/2011 9:40 PM, Blogger James E. Miller said...

"I do not believe in fiscal stimulus. I believe in monetary stimulus, as advocated by Milton Friedman."

I suppose you also think deflation is bad for the economy and that inflation is a great fix despite it being a hidden tax. Is the monetary stimulus you promote in direct relation to the previous inflation efforts of the Fed to keep the party going? Or is the Fed not responsible for keeping interest rates too low for too long?

"Gasoline does what it does depending on the mideast, not US monetary policy." Disregard the fact that we get most of our oil from Canada and Mexico for now, does inflating the currency really not affect energy prices? I would love to hear the rational behind that.

 
At 3/20/2011 3:29 PM, Blogger Ron H. said...

James E. Miller said:

"I suppose you also think deflation is bad for the economy and that inflation is a great fix despite it being a hidden tax."

Benji, I think he has your number. He's on to your nonsense already.

 
At 3/21/2011 1:31 AM, Blogger James said...

Owners’ equivalent rent of primary residence and other CPI foolishness

There is a video on the CPI here including a good discussion of the foolish used to account for the cost of home ownership.

 

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