Friday, September 30, 2011

Prices Are Going Up Faster Than a Year Ago

The below chart was created by the Dallas Federal Reserve.

The chart plots the evolution of the distribution of price increases in the monthly component data over the past year. The chart shows the percentage of components each month, weighted by their shares in total spending, for which prices grew between 0 and 2 percent (at an annual rate); between 2 and 3 percent; between 3 and 5 percent; between 5 and 10 percent; and more than 10 percent.

Thus, you can see that the purple chart area is narrowing, which means fewer prices are going up on an annual basis in the range of 0% to 2%. On the other hand, the blue range is increasing which are prices that are climbing between 2% and 3%. Most interesting is the green region, which is up over the last two months. This sector is of prices that are going up on an annual rate of more than 10%. It shows that 14.8% of prices are climbing at an annual rate of more than 10% (The low was 3.8% climbing 10% plus in Nov 2010).

Bottom line, if it feels that prices are climbing much faster than is reported by the BLS, it's because many prices are. Over 50% of prices are now climbing at an annual rate greater than 2%, whereas in September 2010, more than 50% of prices were climbing at a rate less than 2%.


  1. Dammit! Krugman told me this wouldn't happen.

  2. So the white/unshaded area represents prices that are falling?

    Kind of dumb to graph percentages of a whole and not have it add up to 100% at each data point.

  3. The dogfood I buy for the Pupster has gone from 22.99 to 26.99, for a 50lb bag, in the last 12 months. The gov's mucking around with corn-ethanol must account for some of this, but not all. I got him,(the dog), a fuzzy-man chew toy which we call Bernanke. The Pupster is a pitbull/labrador mix and he's very enthusiastic about mauling Bernanke. "Shake Bernanke!",I say, "Get him!, he's driving up the cost of your dinner." I don't know how much longer Bernanke will last.

  4. White = Real-estate. LOL

  5. The white area is mostly stagnant prices.

  6. @E.G.Palmer Thanks for the good laugh!

  7. Yes, thanks for a chuckle EGPalmer. In these dark times before the dawn, we need humor more than ever.

    Plus, it gave me an idea for my new compost barrel.

    "just chuck the scraps into The Bernank" is my new phrase for veggie scraps head to be used for compost. It smells like shit anyway.