You know how you go to the gas pump, and every day the price is higher than the day before?
And when you go to the grocery store, the price of milk, bread and eggs is much higher than it was last month?
Well, you’ll be happy to know that it’s not actually happening. Your wallet isn’t draining any faster than it was last month. You know how I know? Because the government says so.
I got this in my e-mail this morning, from the BLS:
Consumer Price Index:
On a seasonally adjusted basis the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in April after increasing 0.3 percent in March. The index for all items less food and energy increased 0.1 percent, following an increase of 0.2 percent in March.
Don’t you feel relieved? That means, if you spent $2000 on basic
consumer goods in March, you paid $2004 in April. And we know it’s
true, right? The government would never lie to us, right?
But wait… there’s more…
When you go to the press release, you’re told the following:
On a seasonally adjusted basis, the CPI-U advanced 0.2 percent in April, following a 0.3 percent increase in March. The index for energy was virtually unchanged after advancing 1.9 percent in March. In April, the index for petroleum-based energy fell 1.6 percent, offsetting a 2.5 percent increase in the index for energy services. The food index rose 0.9 percent in April. The index for food at home increased 1.5 percent, reflecting substantial increases in all six major grocery store food groups. The index for all items less food and energy advanced 0.1 percent in April, following a 0.2 percent rise in March. Downturns in the indexes for public transportation, for household furnishings and operations, and for recreation, coupled with a larger decline in the index for lodging away from home, more than offset an upturn in the index for apparel.
During the first four months of 2008, the CPI-U rose at a 3.0 percent seasonally adjusted annual rate (SAAR). This compares with an increase of 4.1 percent for all of 2007. The deceleration thus far this year reflects smaller increases in the indexes for energy and for all items less food and energy. The index for energy advanced at a 6.3 percent SAAR in the first four months of 2008 compared with 17.4 percent in 2007. Petroleum-based energy costs decreased at a 0.7 percent annual rate while charges for energy services rose at a 17.7 percent annual rate. The food index has increased at a 6.9 percent SAAR thus far this year, following a 4.9 percent rise for all of 2007. Excluding food and energy, the CPI-U advanced at a 1.8 percent SAAR in the first four months, following a 2.4 percent rise for all of 2007.
Read that again, and feel free to laugh. Prices for everything you buy only went up 4% last year, and they’re going up even less this year.
This is how the government comes up with its inflation figures; the figures it uses to determine how much to pay its employees, and how much they should be paying out in Social Security and other programs. They throw out these numbers, and they’ll repeat them on the news as short headlines, but they won’t actually ask any questions about what the numbers mean.
Think about that energy cost figure; The index for energy was unchanged why? Well, one reason could be that you’re not heating your house for winter anymore. Therefore, the fact that gas went up 35 cents a gallon, or 12%, last month doesn’t matter as much, because you’re not burning as much gas or electricity to heat your home. Okay, that might be a fair assessment, at least until summer. But look more closely; the index for petroleum-based energy FELL 1.6%? Offsetting a 2.5% increase in the index for energy SERVICES? So, it wasn’t the gas that was going up in price all month; it was the cost of providing it to you?
Do you get the impression that someone is pulling your leg? When did this get complicated? The gasoline I purchased in March at my local station was $3.29 in March, and it was $3.69 at the end of April. My gas and electric bill was $158 in March and $92 for April. all you have to do is figure out how much gas i purchase on average, and add it to my gas and electric bill and you get my personal energy "index" for the two months. It’s not difficult. But they want it to be complicated, so that they can figure out a way to keep the number low, and hope you won’t notice.
Take the last part of the paragraph above, and think hard. The price of groceries is up 1.5%, and the cost of energy, even with their convoluted methodology, is "unchanged." of course, we all spend more on food each month than energy, so the average should still be above 1%, right? Plus, if you look closely, they also mention a small uptick in clothing prices, something we all need pretty regularly, although I’m not sure we buy that stuff every month. Well, it’s not that high, if you include downturns in indexes for public transportation (which I don’t get; are some cities reducing fares or something?) household furnishings (because retailers are cutting prices to lure people into stores, perhaps?) and — I laughed out loud at this one — lodging away from home.
In other words, what the government is telling us is this; don’t be whining about inflation, just because the cost of food, energy and clothing are climbing; the price of taking the bus is apparently down, as is the cost of a new couch and a night at a Hilton Hotel. Of course, you can’t afford the gas to go to a hotel in the first place, but hey, they are lower, you cheapskate.
This is such a scam, folks. I’d love to blame Bush for this one, but they’ve been lying to us for quite some time. they fudge the inflation numbers, because government payments are indexed to it, and if they told us the truth, the deficit would have to be bigger.
See, this is why voters have to trust their instincts, and not what anyone in government tells them. People have good instincts; government’s first instinct is to cover its butt.