More Inflation-Deflation Spin...

[GRG55]

Nobody is ever likely to accuse the MSM of consistency in reporting...:rolleyes:

One year ago, when energy and food were spiking, the news reports continued to support the official Bernanke line that inflation expectations were "well anchored"...because core inflation wasn't rising very quickly.

Now that food and fuel have been declining the headlines exclaim that consumer prices are declining. But of course they are now using headline inflation, because...wait for it...core inflation is still going up.

From Bloomberg this morning:

Consumer Prices in U.S. Drop as Fuel, Food Decline

April 15 (Bloomberg) -- The cost of living in the U.S. unexpectedly fell in March, underscoring Federal Reserve forecasts that inflation will be contained in coming months.

The consumer price index decreased 0.1 percent compared with a 0.1 percent gain projected by the median forecast of economists surveyed by Bloomberg News, according to figures from the Labor Department issued today in Washington. In the 12 months ended March, prices fell 0.4 percent, the first decline since 1955...

We found this tucked away later in the article:

...Costs excluding food and energy, so-called core prices, climbed 0.2 percent for a third month, more than the projected 0.1 percent increase anticipated by economists surveyed.

The core rate climbed 1.8 percent from March 2008, matching February’s year-over-year increase...

And then there's this interesting little contradiction that goes unexplained:

...Companies from General Motors Corp. to Macy’s Inc. are using incentives and promotions to draw customers...

...The other gainer was new vehicles, which cost 0.6 percent more...

Followed by this little gem:

...Other reports from Labor also indicate inflation isn’t a concern...

...The cost of goods imported into the U.S. rose in March for just the first time in eight months...

Clear as mud...:rolleyes:

[Slimprofits]

Re: More Inflation-Deflation Spin...

Looking at the report

http://www.bls.gov/news.release/cpi.t01.htm

I find a few interesting items:

Food away from home is up 4.6% yoy in March '09, is up .3% from Dec. '08 to Jan. '09 and Jan. to Feb. and .1% from Feb. to March.

On the other hand, restaurant sales fell .06 from Feb. to March.

Residential rents are up yoy and month to month from Dec '08 - March '09.

I wonder how that breaks down regionally. In the big bubble areas, rental supply is up, but is demand? Supposedly more people are opting for roommates and sharing arrangements.

Medical care and education costs continue to rise every month.

I recently moved from rural Northern California to urban Eastern Massachusetts. Prices for dairy products, fruits and vegetables are roughly 25% - 50% less in Mass. The small city that I moved to near Boston is feeling the recession much more now than last June (date of last visit). There are many restaurants and bars in the downtown area and accept for a few of the most popular, they're mostly dead every night. And in the places with actual customers, I'm seeing almost everyone else pay their bills with credit cards.

This feels like the calm before the storm - people are out of cash, but still want to go out so those with credit cards are running them up now, hoping for the best economically later on.

[GRG55]

Re: More Inflation-Deflation Spin...

...I recently moved from rural Northern California to urban Eastern Massachusetts. Prices for dairy products, fruits and vegetables are roughly 25% - 50% less in Mass...

I had heard that California was an expensive State to live in, but 25% to 50% seems like a lot for the dubious privilege of living in the Golden State.

It's particularly astonishing when one considers how large the fruit and vegetable agriculture sector is in California...so large that produce from that State is marketed all around the world. I used to regularly purchase California grown fruit in the Middle East.

[Slimprofits]

Re: More Inflation-Deflation Spin...

I had heard that California was an expensive State to live in, but 25% to 50% seems like a lot for the dubious privilege of living in the Golden State.

It's particularly astonishing when one considers how large the fruit and vegetable agriculture sector is in California...so large that produce from that State is marketed all around the world. I used to regularly purchase California grown fruit in the Middle East.

In comparison, very high prices in particular for any type of berry, spinach, eggs, jars of pasta sauce, milk and then even some canned vegetables.

And this would be compared to two chains and a local hippy owned grocer in the former town.

[sishya]

Re: More Inflation-Deflation Spin...

I had heard that California was an expensive State to live in, but 25% to 50% seems like a lot for the dubious privilege of living in the Golden State.

It's particularly astonishing when one considers how large the fruit and vegetable agriculture sector is in California...so large that produce from that State is marketed all around the world. I used to regularly purchase California grown fruit in the Middle East.

I moved to Central Valley, CA from Chicago, IL 8 months ago. I found everything cheaper here. Housing - $600 /per month cheaper(for similar houses), Red Onion - $25 Cents/lb, peaches,nectarines,tomatoes - $49/lb.
Everything cheaper at FoodMaxx here except Milk and Meat. I recently bought salmon for $2.49/lb, which is not possible anywhere else. I have to disagree on your assessment. CA is lot cheaper NOW than most places.

[LargoWinch]

Re: More Inflation-Deflation Spin...

I like when they use the term "unexpectedly" for all that is positive news:

The cost of living in the U.S. unexpectedly fell in March...

Worse is that it is everywhere:

New jobless claims fall unexpectedly to 610,000,

I think it is MSM way of saying: "Look, at that great surprise! Don't be affraid to buy stocks and houses"

[Slimprofits]

Re: More Inflation-Deflation Spin...

I moved to Central Valley, CA from Chicago, IL 8 months ago. I found everything cheaper here. Housing - $600 /per month cheaper(for similar houses), Red Onion - $25 Cents/lb, peaches,nectarines,tomatoes - $49/lb.
Everything cheaper at FoodMaxx here except Milk and Meat. I recently bought salmon for $2.49/lb, which is not possible anywhere else. I have to disagree on your assessment. CA is lot cheaper NOW than most places.

Maybe we were being gouged in Mendocino County? Interesting that you are comparing Chicago with the Central Valley and I'm going in the other direction - Rural, tiny population Mendocino County against Boston.

I was kind of surprised to see the lower prices on those particular items at the Supermarkets in Eastern Massachusetts. Comparable area rents in Boston are still lower than in SF, Oakland and Berkeley.

my car insurance costs are lower here, not to mention sales tax 5% in MA - 8% in CA, annual car registration tax (close to $200 now in CA), state income tax over 10% now in CA compared to between 5-6% in MA, lower electric rates, lower gas prices.