This week was a busy week for economic information with the release of the MARTS Retail Report, the weekly unemployment claims data, and the Consumer Price Index data. The MARTS report showed a huge spike in retail sales compared to November 2016, with a 6.35% increase over November 2016 data and a 4.51% overall growth rate during the rolling year. The naysayers would say that this is "all due to inflation." This is not the case. The authors of the report recorded a 2.2% inflation rate for the CPI-U (Urban Wage Earner) rate of inflation. Note that the graph is a non-zero chart which makes it appear that inflation is non-existent. Last year's November CPI report painted a slightly different picture. The same can be said regarding the November 2015 CPI report. We have gone from 0.5% inflation during November 2015 to 1.7% during November 2016 to 2.2% during November 2017. Note that All items less food and energy dropped from 2.0% during November 2015  to 1.7% during November 2017. There are three things to take away from this month's CPI report: We continue to have service inflation. We continue to have commodity deflation. We had "zero" health insurance inflation during the past year.

Commodity Deflation plus Service Inflation equals Unremarkable Inflation. The story behind the story is the weighting of the basket of goods. If you look at he first "Christmas" table {November CPI: Commodities Saw Deflation - Services Saw Inflation - Again) You will notice the the combined weighting has increased from 98.565% (2015) to 99.406% (2016) to 99.544% this November. You will also note that the commodity Relative Importance (RI) was generally reduced for Commodities and increased for services. Household operations are up. Shelter Costs are up (Again.) Last year this column calculated the inflation at 1.80% due to the skewing of the RI instead of the official 1.7%. The authors like to exclude the "volatile" food and energy prices. That must be nice to do during the Thanksgiving Holiday month. Energy inflation November to November was 9.4%. Food inflation was 1.4%. The combined RI is 21%. It must be nice to exclude 21% of your spending from inflation.

What cost you $4000 last November cost you $4066 this year. It is even worse than that. What cost you $3978 last November cost you $4066 this November. Food and energy cost you $35 more this November. Services cost you $21 more this November. Shelter costs were up $43 from last November. You "saved" $10 on commodities this November.

There was Zero Health Insurance inflation last year. Really? Supposedly there was 0.00% inflation and health insurance took less of a bit out of you spending with a drop in RI from 1.1013% to 0.995%. Really? What happened to those premium increases that were reported last year? What happened to those increases to premiums this year that have been reported?

The weighting of the basket of goods is skewing the data lower than it could have been reported. The inflation for the past two years has been real and really under-reported. We are seeing commodity deflation and service inflation. Shelter costs and energy costs have surged since last November. The "gasoline stimulus" is gone. The surge in retail sales is not due to inflation - it may be due to "deflation." Medical care service are up. Hospital and related services are experiencing inflation. Medical care commodities are experiencing inflation. Details matter.

It's the economy.