Inflation data

in the last video we talked a little bit about what inflation is and the Consumer Price Index and I so I thought I would actually show you data and maybe point out a few interesting things right over here so this right over here is the monthly press release or it's a table from the monthly press release issued by the Bureau of Labor Statistics and then this is table A which is really a summary of all of the important things it's the percent changes in CPI for all urban consumers the CPI - you and they do it for non or urban consumers and all the rest but the CPI that is quoted is the one for urban consumers the US City average and what I always find is that the details are much more interesting than what you hear just on the news when people say oh the CPI changed by 0.5 you know 0.5 percent and one thing I do want to point out it this is true of the CPI this is true of all government statistics and frankly this is true of any report that any company gives you it's very important to keep in mind whether they're giving a sequential change or whether they're giving a year-over-year change so for example they might there might be a press release there might be a press release like this one and the text of it or maybe the headline number when you look at the your local newspaper your news report will say look in June 2011 inflation on all items on the entire basket of good went that basket of goods went down by 0.2% and you might say oh wow look there's no inflation in fact what prices are going down this would be minor deflation but it's important to realize that this is only the seasonally adjusted prices from May to June from May to June and when I talk about seasonally adjusted and that traditionally maybe people use a different amount of energy a different amount of gasoline from May to June and they try to factor that in when they compare the basket of good the price of the basket of good from May to June so that's what they talk about seasonally adjusting but if you look over here the prices went down from May to June according to according to adjusting it for the season but the year-over-year changes are still up if you compare June 2011 to June 2010 it is still up by 3.6 percent and in general the monthly things are going to be a little bit more volatile obviously of the seasonal adjustments you have other short-term factors that might change it but the over a year one is a is a is a stronger signal for what is actually happening for inflation although someone might want to pay attention to the monthly one because that's obviously giving you kind of the most up-to-date of what's happening now and what you'll often see is they'll give an inflation number for everything and then they'll subtract out actually food and energy so this is all items less food less food and energy and that's because food and energy they represent a good bit of the basket but they're very very volatile you can see it right here in this report year-over-year energy energy has gone up double digits 20% for for for energy generally if you look at fuel oil 35.6% at least on this reports been coming down more recently but year-over-year it's been up a huge amount and so that's actually the main driving factor for this three point six percent if you take food and energy out of the equation if you compare the basket of goods - that inflation was only up 1.6 percent it's interesting even within that you can look at which which parts of the economy or which products and services are getting a lot more expensive and which ones are getting cheaper it's actually interesting that used cars and trucks are up five point one percent that seems like a pretty strong price increase for for used for used things