19 May 2010

CPI Up 2.2% Over Last Year

Economics, Inflation 7 Comments

The CPI numbers are out. According to our trusty government officials, prices rose 2.2% from April 2009 to April 2010. Of particular interest is that the “energy” component of the CPI is up 18.5% for that 12-month period.

Now I know some of you are mad for two reasons:

(1) I keep making forecasts instead of sticking to a priori analysis, and

(2) I keep citing bogus government numbers, when the true price inflation rate is much higher.

In response, all I can say is that it would be a bloodless economic theory if it never gave you the confidence to say, “Holy cow, we are moving in a terrible direction here, and the government is setting us up for disaster.”

Also, I am using the government’s numbers because I don’t want to look like I’m just arguing with definitions. If and when the price inflation comes that I have been expecting, we’re not going to need to decompose seasonal adjustments, hedonic indices, and the like; it’s going to be obvious. The reason I use the government’s own figures is that they don’t support the official narrative. Look, from April 2003 to April 2004, CPI rose about 2.3%. We didn’t fall into a deflationary black hole then, and the monetary base didn’t look like this at the time.

7 Responses to “CPI Up 2.2% Over Last Year”

  1. Andy says:

    In regards to the 18.5% energy increase, just to verify, that’s the “food and energy prices?” I see it in this article as-well.


    So the government doesn’t include “food and energy” in there CPI numbers?

  2. Political Catechism says:

    Food prices are soaring in other ways as well. For example, I am finding less offerings in canned food for no decline in price. Burgers which used to cost a dollar or more are as high as 2.51 CAD.

    It’s time for Bob Murphy to start his own inductive survey regarding food prices.

  3. Robert says:


    Could you explain a bit more about what you mean when you said, “the reason I use the government’s own numbers is that they don’t support the official narrative.” Thanks,


  4. Leo says:

    Mr. Murphy,

    Where would you say the best place to buy silver bullion is?


    • Andy says:


  5. Lucas M. Engelhardt says:

    What infuriates me… People (including the WSJ) just keep citing the Core CPI, and saying “Inflation is under 1% year over year!!!”

    I’m okay with using Core CPI for month-to-month. Food and energy prices are volatile, and it’s very possible that one month’s increase will be wiped out by the next month’s decrease. But, using Core CPI for year-over-year changes? That’s fine if we’re Amish and anorexic. For most of the population, food and energy are pretty significant expenses.

  6. Sam says:

    “It’s time for Bob Murphy to start his own inductive survey regarding food prices.”

    There already is a substitute index called the Jar Of Pickles/Package Of Muffins index, which is based on Costco’s Mt. Olive large pickle jars and WalMart’s brand English muffins. It’s up catastrophically over the last several years, hovering around 50% in total.