December 19, 2012

THE DEFLATIONARY EPOCH:

What a new inflation measure would mean for your wallet (Annalyn Kurtz, 12/19/12, CNNMoney)

The government currently measures price increases using the Consumer Price Index, which tracks a broad basket of consumer goods. That measure is also used to determine increases in tax brackets and cost-of-living adjustments for retirees receiving Social Security benefits.

But some critics say the government is overstating inflation. In reality, when prices rise, consumers turn to alternatives instead of paying more. So for example, if prices rise significantly on beef, they may buy chicken instead.

Enter "chained CPI," a separate measure that accounts for such substitutions, and therefore paints what some call a more realistic picture of inflation's impact on consumers.

With Christmas Eve church services coming up, I bought a J Crew blazer, pair of LL Bean chinos and a Ralph Lauren button down at the Thrift Store for $9.  
Posted by at December 19, 2012 6:00 PM
  
blog comments powered by Disqus
« NEVER TOO LATE TO REALIZE YOU WERE DERANGED: | Main | MAN JUST ISN'T THAT POWERFUL: »