The BEA’s Personal Income and Outlays Report for August has the details.
- Personal income increased $60.3 billion (0.3 percent) in August.
- Disposable personal income (DPI) increased $51.4 billion (0.3 percent)
- Personal consumption expenditures (PCE) increased $46.4 billion (0.3 percent).
- Real DPI increased 0.2 percent in August and Real PCE increased 0.2 percent.
- The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased less than 0.1 percent.
The BLS says core inflation is zero and year-over-year core inflation is 2.0%.
Your results may differ substantially especially if you buy your own health insurance, don’t have health insurance, are in school, are looking to buy a house, or live in a high rent area.
Curiously, a debate over where inflation should be is underway at the Fed and at central banks in general. For discussion, please see Rethinking the Fed’s 2% Inflation Target: Spotlight On an Absurd Debate.
Mike “Mish” Shedlock
Sure sounds like low unemployment is a complete and utter lie.
“Inflation is benign, assuming one believes the BLS measure.”
The inflation gaming. If the price of steak goes up dramatically, they substitute chicken, because it moved up less, thus they assume people switched to chicken, so their cost of meat didn’t rise that much. Of coarse, they could just assume that since steak rose dramatically, some people just quit eating meat altogether, thus the cost of meat crashed.
When oil ramped up in the early 70’s, they manipulated the inflation rate by creating a separate category. Then food ramped up and they did the same with it. People don’t live by a core rate of inflation, they eat and drive to work, as well.
Venezuela solved their inflation problem by cutting zeros off the currency and mandating a 400% pay increase. Apparently some 40% of stores shut down in response, but pay no attention to that equal and opposite Newtonian reaction.
It is fun to speculate on what the rate of inflation actually is or where it is heading, but what really matters is the general standard of living, which has been declining for some time. Back in the late 70’s when inflation was running hot, i didn’t consider it particularly expensive to go to Disneyland for a day or to go to a movie, with a drink and popcorn. Now, i do.
“Your results may differ substantially especially if you buy your own health insurance, don’t have health insurance, are in school, are looking to buy a house, or live in a high rent area.”
It is political ad season, again. Ads have been running in L.A. for Prop 10, some kind of rent control. One ad has a tag line “…because rents are too damn high.” Of coarse, the ad doesn’t talk about why rents are “too damn high.”
when you’re runnin multi trillion dolla yearly (soon to be monthly)deficits in a “booming”lol economy the inflation “rate” like the unemployment “rate” the gdp “rate”has to “play along”.2%inflation “rate” is not sustainable when you’re danger close to half trillion a MONTH deficits!
I got this awful feeling that the BLS computes inflation almost solely using gasoline and diesel pump prices. They are easy to collect, transparent, truly market driven, and reach into almost every part of the economy. Hope Im wrong, but …
The real problem is the hedonic adjustments. Say your refrigerator that you paid $500 for 10 years ago needs to replaced with a new refrigerator that costs $1,000. Does it cost 2x as much? Not according to the BLS. See, the new refrigerator is 50% more efficient, so it really only costs 10% more.
They need to do that to perpetrate the fake numbers, trying to keep a lid on interest rates. It’ll work until the sheep revolt