15 Oct 2009

BLS Reports a Modest Increase in CPI for September

All Posts No Comments

Well, I purposely went on record yesterday before seeing the numbers, so that I could have some semblance of objectivity. I said, “If it’s relatively tame, then I think Bernanke will have successfully tamed the domestic inertia in prices.”

Today the BLS reports that the actual CPI went up 0.1% from August to September, and after seasonal adjustment they report it as a 0.2% hike. It’s still very misleading for people to cite year/year changes and say “we’re still experiencing deflation,” as this picture indicates.

It’s also possible that the BLS is fiddling with their method in order to keep the numbers tame. But obviously if I am warning people about the potential for double-digit price inflation, I shouldn’t have to rely on these possibilities. So, until something changs, I will concede that Bernanke seems to have succeeded in pumping in all those new reserves without lighting an inflationary firestorm on the domestic front. (There is still the wildcard of foreign demand.)

Comments are closed.