For Many Consumer Items, Prices Are Falling
|Food (actual prices)|
|CPI: Household Items|
|Wireless Phone Services||-0.6%|
The chart above shows a sample of 30 products or services that have experienced deflation in the last year (June 2011 to June 2012 for most items). The 19 food items and three energy items are based on actual "average price data" from the BLS, and the household items are based on CPI indexes for those items.
Overall, "inflation" describes a period when most prices (and wages, interest rates, and home prices) are rising, and I don't think we're anywhere close to meeting those conditions yet. Certainly not as long as so many prices for food, energy and household items are declining or staying the same, and not rising. Any notion that "real" inflation is now running about 8-10% at an annual rate according to some adjusted "real" measure of consumer prices seems to be very misguided, and not supported by the actual price data presented above for many food and energy items.