Paying more for energy


As a followup to yesterday’s post about the disconnect between widely reported inflation numbers and some of the components, today I’m looking at energy.

The chart above shows the average hourly earnings of all employees (CES0500000003, black line) compared to two other series. As before, I’m presenting the Consumer Price Index for All Items (CPIAUCSL, green line) and the Consumer Price Index for Energy (CPIENGSL, blue line). All three series are sampled and reported monthly and to aid in presentation I’ve baselined all three series at 100 on September, 2007.

While wages have increased by roughly 11% across the period, the broad Consumer Price Index increased by 11% as well. But over the same period the price of energy (series Consumer Price Index for Energy or CPIENGSL has increased by about 22%. Big difference between the “official” inflation numbers and this single component.

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