SEARCH BLOG: ECONOMY
Inflation is one of those scare factors that have taken a back seat recently to U.S. politics, Iran and Climate Change. According to one article at the website Seeking Alpha, inflationary pressures are pretty tame:
Bottom Line: Compared to last summer for the three and six month periods ending in July 2011, inflationary pressures fell significantly towards the end of last year and in the first month of 2012 for the three and six month periods ending in January. Inflation for food at home has fallen to only 1% (at an annual rate) for the November-January period.
But... according to another article at that same website:
Prices for food and beverages rose 0.2 percent, up 4.2 percent from a year ago, while housing costs were up 0.1 percent and are now 1.9 percent higher than last year at this time in a report that was unusual insofar as there were no major categories posting price declines, as evidenced by all the red bars extending upward in the graphic above.
Energy and food prices seem to be the culprit for the mixed messages... large year-over-year changes, but small changes last month. Clothing and transportation prices are increasing rapidly, but those are expenses that can be deferred... unlike heating, electricity, and food.
While gasoline prices are up, natural gas prices are extremely low and this very mild winter has made overall energy costs much more tolerable.
The real pain in energy will be felt when we have another cold winter and oil prices drive up gasoline to even higher levels.