Category Archives: Inflation

US Inflation Calculator Update

U.S. consumer prices inched slightly higher in May and less than expected according to a new report released by the government on Wednesday. The same report revealed year-over-year inflation has fallen at the fastest rate since April 1950.

The Bureau of Labor Statistics Consumer Price Index (CPI) data has the annual US inflation rate at -1.3% compared to April’s 0.7% decline. Cheaper energy over the past year is largely responsible. Continue reading US Inflation Calculator Update

Producer prices inch 0.2% higher on energy prices, inflation in check

U.S. producer prices picked up in May, but they were less than expected despite increasing costs at the pump.

The Producer Price Index (PPI) rose by 0.2% last month, according to a report on Tuesday released by the Labor Department. The PPI measures prices at the factory door and inflation pressures before they reach the consumer.

"This clearly suggests there’s no inflation yet," Anika Khan, an economist at Wachovia Corp. in Charlotte, North Carolina, was quoted on Bloomberg. Price gains are "a gasoline story… companies can’t pass on the prices because the consumer is not in a situation to pay right now."

The PPI has fallen 5.0% in the past twelve months and is the biggest year-over-year decline since 1949. Continue reading Producer prices inch 0.2% higher on energy prices, inflation in check

Annual inflation at -0.7%, sharpest drop in consumer prices since 1955

Despite a flat reading for U.S. consumer prices in April, the annual inflation rate fell with the sharpest decline in 54 years, the government reported on Friday.

The Labor Department said the Consumer Price Index (CPI) remained unchanged in April after decreasing 0.1% in March. However, a reduction in the cost of energy over the past 12 months helped drive the annual rate 0.7% lower, marking the second straight monthly dip and the biggest decline since August 1955.

"The era of U.S. consumer price deflation is now upon us as the ongoing economic recession and deteriorating labor market conditions continue to weaken the bargaining power of retailers and laborers alike, thereby quenching the once raging inflationary flames," Millan Mulraine, economics strategist for TD Securities, was quoted on Forbes.com

There is a debate raging between economists on whether a threat to the approaching economy is rising inflation or spiraling, out of control falling prices, known as deflation. Continue reading Annual inflation at -0.7%, sharpest drop in consumer prices since 1955

Inflation calculator, rates update – 5/15

U.S. consumer prices from a year ago have fallen by the biggest amount in more than 50 years, the Bureau of Labor Statistics (BLS) said in a report provided on Friday, May 15. To be more exact, prices had not dropped as fast since August 1955.

The Consumer Price Index (CPI) data has the annual inflation rate at -0.7% compared to the March rate of -0.4%. It was cheaper energy that helped pull down prices. Compared to a year ago, energy prices dropped 25.2%. (While gas prices at the pump have been rising recently, those figures will not be calculated into available data until next month’s report is released.)

On a monthly basis, consumer prices remained unchanged following the 0.1% declined in March and the 0.4% increase in February.

The Inflation Calculator is updated with the newest government information, as are the following pages:

CPI Data from 1913 to 2009

Inflation Rates: 1999-2009

Historical Inflation Rates: 1914-2009

Annual Averages for Rate of Inflation

For an in depth look at April consumer prices, read the article Annual inflation at -0.7%…

Producer prices rise 0.3% on higher food prices

Producer prices in the U.S. reversed course from March and climbed to a higher than expected 0.3% in April, according to the Labor Department’s Producer Price Index (PPI) report on Thursday. The PPI measures prices at the factory door and inflation pressures before they reach the consumer.

In March, cheaper energy pushed down prices by 1.2%, leading to renewed fears of accelerating deflation. In April, the government data shows that a 1.5% increase in the cost of food offset a 0.1% fall in energy prices — energy costs were down 5.5% in March. And with that, some of the deflationary steam has been evaporated. Deflation is a persistent decrease in general prices, or the opposite of inflation.

"It’s impossible to see how deflation can persist given the amount of liquidity in the system," Maxwell Clarke, chief U.S. economist at 4Cast.com in New York, was quoted on Bloomberg. "With oil moving back up, the thought in people’s minds becomes that inflation could ultimately become a problem that outweighs deflation."

It is worth noting that the PPI index has fallen 3.7% when compared to the same period last year, marking the biggest year-over-year fall since January 1950. Continue reading Producer prices rise 0.3% on higher food prices

March consumer prices drop 0.1%, annual inflation tumbles 0.4%

Pushed down by declining energy prices, U.S. consumer prices dropped in March, and the annual inflation rate dipped for the first time since 1955, the Labor Department reported Wednesday.

The Consumer Price Index (CPI), the most closely watched gauge for inflation, fell 0.1% after increasing 0.4% in February. The decline was unexpected with many analysts forecasting an increase around 0.1%. On an annual basis, inflation was down 0.4%, marking the first decline since August 1955.

While deflation fears were eased with rising prices revealed in the CPI data for February, the latest numbers rekindle notice.

"We’re in a very deep global recession that’s going to hold prices down," Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, was quoted on Bloomberg. "Deflation is still something that’s a risk, though I don’t think we’ll get into a deflationary spiral."

However, during the last several weeks an outlook for potential stinging inflation has been more of the economic buzz. Continue reading March consumer prices drop 0.1%, annual inflation tumbles 0.4%

Inflation calculator, inflation rates update – 4/15

U.S. consumer prices dropped unexpectedly in March and marked the first annual drop since 1955, according to the latest data from the Bureau of Labor Statistics (BLS) provided on Wednesday, April 15.

The Consumer Price Index (CPI) data has the annual inflation rate at -0.4% compared to the February rate of 0.2%. On a monthly basis, consumer prices fell 0.1 percent, after increasing 0.4 percent in February.

The Inflation Calculator is updated with the newest government information, as are the following pages:

Consumer Price Index Data from 1913 to 2009

Current Inflation Rates: 1999-2009

Historical Inflation Rates: 1914-2009

Annual Averages for Rate of Inflation

For an in depth look at March consumer prices, read Consumer prices drop 0.1%.

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Cheap energy pushes producer prices down 1.2%

U.S. Producer prices fell 1.2% in March as lower energy prices drove down costs more than expected, according to a Labor Department report released Tuesday.

The Producer Price Index (PPI) measures prices at the factory door and inflation pressures before they reach the consumer. In a reversal after two months of gains, the latest PPI figures again raise notes of deflationary concern for some economists. However, they are outweighed by the Fed’s mission to spur economic activity.

"Clearly, deflation is a concern right now, though the biggest worry is to restore growth," Anika Khan, an economist at Wachovia Corp. in Charlotte, North Carolina, was quoted on Bloomberg. With inflation contained, "it gives the Fed more room to try to restore growth."

Deflation is a persistent decrease in general prices, or the opposite of inflation. Falling prices may seem like good news for consumers, but only to a certain extent. If prices mark sustained deflationary levels that strike below the cost to produce goods and services, further economic turmoil can ensue with production cuts, payroll reductions and deepening unemployment. Continue reading Cheap energy pushes producer prices down 1.2%

Fed to buy $1 trillion in securities, expects inflation to remain subdued

With expectations for inflation to remain under control and in a move to combat the recession, the Federal Reserve on Wednesday said it would pump more than $1 trillion into the economy.

In a statement following the conclusion of its two-day policy meeting, the Federal Open Market Committee (FOMC) said it would:

  • Increase its purchases of mortgage-backed securities by $750 billion, on top of the already announced $500 billion
  • Buy $300 billion of long-term Treasurys over the next six months

The Fed hopes the first measure will pull down mortgage rates and the second will help ease the credit crunch. Immediately following the news, U.S. stocks rallied, bond prices surged and gold prices reversed direction. Continue reading Fed to buy $1 trillion in securities, expects inflation to remain subdued

Consumer prices jump 0.4%, annual inflation at 0.2%

Energy prices drove consumer prices higher for a second month in February and at the fastest pace in seven months, the Labor Department said Wednesday. About two-thirds of the increases resulted from a jump in gasoline pump prices. And with that, the annual U.S. inflation rate climbed to 0.2% after the 0% reading reported in January.

The Consumer Price Index (CPI) increased 0.4% in February — the biggest one-month jump since July — and follows the 0.3% rise in January that economists were again expecting. The extra bump helps dispel some fears of chronic price declines, known as deflation, which can have a devastating impact on the economy and employment.

"Worries about deflation can be set aside right now," Bernard Baumohl, managing director of the Economic Outlook Group, was quoted on NYTimes.com. "It’s unlikely we would have seen inflation drop to negative levels for more than a year, given all the fiscal and monetary stimulus that’s in the economy. The math just didn’t work out."

The CPI is the key government gauge for inflation. The core CPI, which excludes volatile food and energy prices, is even more closely watched. It increased by 0.2% for the second month in a row. Continue reading Consumer prices jump 0.4%, annual inflation at 0.2%