Is inflation making an appearance?

CPI for Food and Beverages, CPIFABSL, Energy, CPIENGSL, Housing, CUSR0000SEHC, 2003 to 2013, monthly % changes

The most recent CPI numbers make for interesting reading. Curious, but in spite of all the money thats been pumped into the US economy over the past few years inflation to date seems very subdued. The chart above shows sector specific CPI as follows: first, the Consumer Price Index for Food and Beverages (CPIFABSL, black bars), next the Consumer Price Index for Energy (CPIENGSL, blue bars) and finally the Consumer Price Index for what’s known as the Owners’ equivalent rent of residences, aka “housing” (CUSR0000SEHC, red bars) for the period 2003 to 2013. All series are calculated as percent change on a monthly basis, and are seasonally adjusted.

Looking at each series across the horizon since the end of The Great Recession we see can calculate the average monthly changes as:

Housing (CUSR0000SEHC) 0.1%
Food and Beverages (CPIFABSL) 0.2%
Energy (CPIENGSL) 0.8%

In spite of the most recent jump we’re just NOT seeing any inflation at present. Energy prices are very volatile, with monthly changes ranging between -18% to 13.5%, compared to Housing which swung from -0.1% to 0.5%. Food was the least volatile, ranging from -0.2% to 0.9%.

Volatility? Yes. Sustained inflation? Nope. But of course that could change …

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