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Consumer Price Index Increased by 0.1 percent in July

PracticalMan

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May 14, 2009
The United States Department of Labor has released the Consumer Price Index through the U.S. Bureau of Labor Statistics. The Consumer Price Index surveys the price of a fixed market of goods and services purchased by consumers. According to the report, the CPI increased 0.1 percent in July on a seasonally adjusted basis.

Read the full report here.
 
I thought this report by the St. Louis Fed was interesting: What Does Money Velocity Tell Us about Low Inflation in the U.S.? | St. Louis Fed On the Economy

Here's the keynote quote:

"Based on this equation, holding the money velocity constant, if the money supply (M) increases at a faster rate than real economic output (Q), the price level (P) must increase to make up the difference. According to this view, inflation in the U.S. should have been about 31 percent per year between 2008 and 2013, when the money supply grew at an average pace of 33 percent per year and output grew at an average pace just below 2 percent. Why, then, has inflation remained persistently low (below 2 percent) during this period?"

When interest rates inevitably rise and all that hoarded money the banks have bottled up is unleashed, what then will CPI look like? Ponderous.
 








 
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