Seeing Inflation Only in the Prices That Go Up_NYT_05-07-2008

Seeing Inflation Only in the Prices That Go Up_NYT_05-07-2008

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
May 7, 2008 Economic Scene Seeing Inflation Only in the Prices That Go Up By DAVID LEONHARDT Next week, the Bureau of Labor Statistics will release its monthly report on inflation, and it sure is going to sound strange. Wall Street is expecting the bureau to announce that the Consumer Price Index rose just three-tenths of a percentage point in April. Over the last year, the index has risen only about 4 percent. Pumps show gasoline prices in Newbury, N.H., in the 1960s. Federal Reserve officials base interest rates on underlying price trends, instead of being overly influenced by gas or food prices. I’m guessing that doesn’t square with your sense of reality. In my household, we just broke the $60 barrier for filling up our gas tank. Nationwide, the price of bananas is up almost 20 percent over the last year, while eggs are up 35 percent. Costco and Sam’s Club recently began rationing rice, to prevent hoarding. All the while, some of the big- ticket items that have been getting more expensive for years — like health care and college — just keep on getting more so.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This contrast between the official government statistics and day-to-day reality has led to a boomlet in skepticism about what the government is up to. Last month, when I did an online Q. and A. with Times readers, I got three separate, thoughtful questions about — of all things — how the inflation rate is calculated. The current cover story in Harper’s, called “Numbers Racket: Why the Economy Is Worse Than We Know,” deals with the same subject. Written by Kevin Phillips, the Nixon aide turned left-leaning commentator, it concludes that the real inflation rate “is as high as 7 or even 10 percent.” This isn’t just an academic discussion about numbers, either. The Consumer Price Index helps determine the size of Social Security checks and affects annual
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Seeing Inflation Only in the Prices That Go Up_NYT_05-07-2008

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online