April 2012 Index
April 19, 2012
Was March 2012 U.S. Year-Over-Year Inflation Down, or Up?
The U.S. Bureau of Labor Statistics report said that year over year inflation slowed to 2.7 percent in March, from February’s reading of 2.9 percent. In their Core inflation data (where they take out food and energy components), the BLS report said the annual price change was actually higher in March, rising 2.3 percent from March to March versus up 2.2 percent from February to February. Either way you look at it, American workers took it on the chin, just as they have been since 2000.
Wages, yet again, did not keep up with price increases. After accounting for rising prices, the BLS says that earnings of workers fell 0.4 percent in March. As we have been saying in these commentaries, the U.S. wage earners’ standard of living is being squeezed by higher prices, and is about to get squeezed by higher taxes as well.
The methods and debate about how to parse inflation statistics are not really important. If wages are not keeping up with prices of imported goods, luxury items, or elastic demand items, people can change their consumption patterns. However, if their wages are not keeping up with the cost of basic necessities, then what?
March Guild Basic Needs IndexTM shows an uptick in the cost of basic essential goods.
April 5, 2012
We are tracking the cost components of basic, essential needs in our Guild Basic Needs IndexTM (GBNI), and energy (for transportation, cooking, and heating) is a key component that we track, along with food, clothing, and shelter components. The GBNI gives us and our readers a picture of the cost inflation that underlies the economy, so stay tuned for our periodic updates on this important data point.