Introduction
Earlier this morning, the Labor Department reported that consumer prices during June rose 0.3%. For those who do not eat or drive, the news was better. Excluding food and energy, the Consumer Price Index was up only 0.1% during the month.
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As the table below indicates, the CPI -- all items -- has been getting steadily worse, measured on a year-over-year basis. But even when you remove food and energy costs, something I personally do not favor in assessing the numbers, the trend is the same. As of June, the CPI, excluding food and energy, was 1.9% higher than a year earlier. As of the end of 2003, the year-over-year gain stood at 1.1%.
Import prices, the Consumer Price Index and the Producer Price Index are three of the four measures we employ in our "Inflation Watch" chart appearing on the GRA website. We will be updating this graph shortly to reflect the latest numbers, now that the June data have been reported for all three.
These three measures are government series that are probably understating "real-world" inflation a good deal. Nevertheless, the numbers, even as rendered, continue to show disquieting trends.
Consumer Producer Import
Price Index Price Index Prices
Month/ ---------------------------------------
Year Y/Y L3Mos* Y/Y L3Mos* Y/Y L3Mos*
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06/04 3.2% 4.8% 4.0% 5.0% 5.6% 5.7%
05/04 3.0% 5.5% 4.9% 8.5% 6.8% 10.0%
04/04 2.3% 3.9% 3.6% 5.3% 4.6% 5.8%
03/04 1.7% 5.1%c 1.4% 5.1% 1.1% 11.5%
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*Trailing 3-month compound annual
rate of change. c = corrected.
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