Monday, April 04, 2011

MIT's BPP Monthly Inflation Rate Has Been Falling

I'm not sure what's going on here, or if this means anything, but the monthly inflation measure from the MIT Billion Prices Project has been falling steadily since mid-February, see chart above.  From the recent peak of 0.82% on February 18, the monthly BPP inflation rate has fallen almost in half, to 0.48% as of April 3, 2011. 

18 Comments:

At 4/04/2011 3:51 PM, Blogger juandos said...

Someone should tell Bill Simon...

Wal-Mart CEO: ‘Serious, Rapid’ Inflation Will Send Prices Soaring

 
At 4/04/2011 4:01 PM, Blogger Bill said...

Would that still not equate to 6% on a yearly basis?

 
At 4/04/2011 4:02 PM, Blogger Benjamin said...

Bill Simon wants you believe you are paying higher prices due to a general inflation..oh, gee why would he say that?

Because it sounds better than, "Thanks to an improving economy, we have found a little pricing leverage. We are in business to make money, and we will make the most money we can for shareholders. So we will raise prices where we can make it stick."

BTW, I think public companies should make the most money they can for shareholders. That is the point.

Also, someone ask Simon why, with unit labor costs falling for two years straight, he doesn't talk about deflation? Why was there no Simon speech in 2010 where he said, "With labor costs sinking, and general deflation on the land, we are cutting prices."

If this is Wal-Mart's top gun, I would sell the stock. I see Wal-Mart stock hasn't done dick for 10 years. 10 years! 10 years on the treadmill!! Simon ought to be a clerk at a Wal-Mart, not running the place.

Since the founder died, Wal-Mart has lost its zip. Used to be a great outfit.

 
At 4/04/2011 4:06 PM, Blogger Benjamin said...

BTWE, inflation is deader than Jimmy Hoffa. Sure, oil blah, blah, blah. Oil is at an unsustainable level. It will come down again.

US farmers are boosting acreages, looking at higher prices and even more federal subsidies. Commodities typically have booms...followed by busts. Nature of the beast.

Gold? Can't tell you. The bulk of gold is sold in India and China for jewelry. It is going up with middle-class incomes in Chindia. Not related to US monetary policy.

 
At 4/04/2011 4:18 PM, Blogger Benjamin said...

Add on Simon: Before Wal-Mart, Simon ran a company named Brinker. That company also has done zilch on Wall Street in the last 10 years.

Simon would be better off improving his management skills than blabbing in public and revealing his profound shortcomings.

 
At 4/04/2011 4:18 PM, Blogger juandos said...

Leave it to pseudo benny to lead with his delusions and not a brain anchored in reality...

You of course of something credible to back up your rant right pseudo benny?

 
At 4/04/2011 4:21 PM, Blogger Bruce Hall said...

It appears that an index of inflation sends mixed signals because some aspects of the economy are inflating quickly [energy, food] while others are deflating [housing, labor].

What it means is that the nation is rapidly experiencing the standard of living erode for large numbers of people while statistically everything is calm.

Aggregation = misinformation.

 
At 4/04/2011 4:27 PM, Blogger Benjamin said...

Ersatz Juandos--

The pathetic stock market record of Wal-Mart and Brinker is easily gleaned online.

And what proof did Simon show that inflation was "serious and rapid"?

Is the roaring CPI, now barely above levels of August 2008?

The Inflation Chicken Littles need to find another sky that is falling.

 
At 4/04/2011 5:17 PM, Blogger juandos said...

"And what proof did Simon show that inflation was "serious and rapid""...

Obviously you didn't check the links pseudo benny...

Americans Just Took a Pay Cut As Inflation Outpaces Wages

 
At 4/04/2011 6:12 PM, Blogger Benjamin said...

Ersatz Juandos--

Cluck, cluck, cluck, my name is Inflation Chicken Little, and I say inflation is going crazy!

It is going crazy!

 
At 4/04/2011 6:27 PM, Blogger juandos said...

"Cluck, cluck, cluck, my name is Inflation Chicken Little, and I say inflation is going crazy!"...

I guess its true, one can't teach an old short bus rider new tricks...

 
At 4/04/2011 7:47 PM, Blogger aorod said...

Taxes aren't coming down. Government spending isn't coming down. Businesses are milking things as long as they can before the other shoe drops. No consumer demand. Only people hiring are for minimum wage. And public unions keep sucking more money out.

 
At 4/04/2011 9:15 PM, Blogger Paul said...

Look how nutty Benji goes after the CEO of Walmart for daring to say what is becoming more obvious each passing day. Benji must be bigtime be upside down on his warehouse investments.

 
At 4/04/2011 9:34 PM, Blogger VangelV said...

Inflation is over 5% and likely over 8%. Ordinary people on the ground no longer believe the reports any longer because their experience differs so much from the false picture that is being reported.

 
At 4/04/2011 10:23 PM, Blogger Benjamin said...

Jaundos-

How about a skinny bald bus rider?

 
At 4/05/2011 9:31 AM, Blogger juandos said...

aorod says: "Taxes aren't coming down. Government spending isn't coming down"...

Yeah, that's a for real observation ...

"Businesses are milking things as long as they can before the other shoe drops"...

Hmmm, I'm curious as to what you might mean here...

Are you talking about something like GE not needing to pay any income taxes in 2010?

 
At 4/05/2011 9:50 AM, Blogger morganovich said...

you are cherry picking mark.

the daily numbers show continued price pressure all year and the yearlies just broke out to new highs.

http://bpp.mit.edu/daily-price-indexes/

prices were up 1.9% in q1 and have been accelerating in 2011 at a rate above the trend of recent years.

do the math yourself:

4/1/11: 103.0551

1/1/11 101.1264

= +1.9287% increase ytd which annualizes to 7.94% inflation.

there has been no meaningful downtick of any kind in the daily numbers all year, look at the chart yourself.

the monthly chart is the only one showing a drop, and it is still near the highs and still reading 0.5% monthly, which annualizes to 6.16%, hardly subdued inflation.

the annual chart is also breaking out to new highs.

you have cherry picked the one way to slice this data to look like inflation is dropping, but even your figure indicates a 6% annual rate if you annualize it.

and, being internet prices, this index should have less inflation than the economy as a whole as it leaves out food, fuel, healthcare, etc and focuses just on the most competitive pricing environment in the world.

i think you have just demolished your own low inflation thesis.

 
At 4/05/2011 9:55 AM, Blogger morganovich said...

another way to look at that monthly chart would be this:

after pulling back from a 4 year high, inflation is still comfortably in the top 10% of it's range over that period and roughly twice its average over the last 3 years and annualizing at 6%.

 

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