If you live in the United States, your cost of living – even by official stats – is rising twice as fast as in Zimbabwe.
Yes, Zimbabwe…the country where at its worst $100 trillion is worth about 30 of the US variety…and good for four loaves of bread.
Yesterday, the Zimbabwe National Statistical Agency announced that consumer prices slowed last month to an annualized 3%.
But this morning, here in the good ol’ USA, the Bureau of labour Statistics (BLS) announced the US consumer price index (CPI) rose 0.5% last month – which works out to a 6% annual clip.
Of course, most of the increase in CPI was driven by higher energy costs and, to a lesser extent, higher food costs. So for Washington policy wonks and central bank honchos alike, the rise in prices doesn’t count.
Food and energy costs are “volatile” and not reflective of “underlying trends” as detected by such farseeing folk:
- Gasoline up 4.7% (56% annualized)? Doesn’t matter
- Public transit up 1.9% (23% annualized)? Statistical noise
- Food consumed at home up 0.8% (10% annualized)? What part of “volatile” don’t you understand?
Thus the “core” CPI, for people who only eat iPads, rose a scant 0.2%. That’s an annualized 1.2%, on the low end of the Fed’s inflationary sweet spot. Print away.
US Inflation Worse than Zimbabwe? originally appeared in the Daily Reckoning. The Daily Reckoning now provides over half a million subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.