Reclaiming Common Sense

The August Monthly Consumer Price Index Report was released yesterday, September 14th, to very little fanfare. The only report that received less attention was the weekly unemployment claims report. We are seeing some inflation and some deflation, depending on the category of spending. The thing that is being ignored is that what was allocated for expenditures during 2015 were less than the allocation for 2016, which was less than the allocation for 2017. Also, Health Insurance cost us less this month than during prior months and years.


The two tables used in this column show how the allocations and inflation rates have changed between August 2015, August 2016, and August 2017 and how the changes in weighting (allocation) and the underlying rate of inflation impacts a consumer who has $4000 a month to spend on these items.


Are we really allocating less of our money for food, furnishings, clothing, transportation and Communication? Did you cellphone and cable bill drop from last year? We have seen 6.4% inflation for energy yet we are allocating the same amount of our budget towards it?


Health insurance costs have been increasing and taking less of our budget? How do we have nearly zero inflation month to month or August to August will "all of the increases" that have been reported? Note that there is a difference between the $99.98 that we spent last year and the $100.51 we spent this year, out of $100. How are we spending "less" on insurance this year than last year? Okay - if you spent $1009 on insurance last year you "spent" $1004 on insurance this year. Don't spend that $5 all in one place. That deflation we were seeing during August 2016 and 2015 due to lower gasoline prices, those "gasoline savings," are no longer present.


Shelter inflation remains persistent. Energy inflation is real.


It's the economy.