December Consumer Price Index Shows Inflation at 3%

Written by: Ryan Watson

The United States Bureau of Labor Statistics released on January 19th its monthly report on the Consumer Price Index.  The current monthly report shows an overall 3.0% rise in composite prices from December 2010 to December 2011, down from a 3.4% yearly increase in November 2010.  The CPI increase for the same period ending in December 2010 was 1.7%.  While 2010 had historically low in increases to the CPI, we saw some significant CPI increases during 2010, with the current CPI increase the largest since December 2006-December 2007.

The Consumer Price Index (CPI) measures the change in pricing of consumer goods and services purchased by households.  The CPI is a measure of inflation on the cost of living expenses on a basic “basket” of market goods, and is closely monitored as a sign of economic health.

Comparing 2011 to 2010, the increase in energy prices has generally slowed.  December 2010 gasoline prices had risen 13.8% from December 2009, and other indices show a similar slowing in the rate of energy inflation.

Food prices also show a significant rise.  Where the December 2009- December 2010 food prices showed a modest 1.7% rise, food prices increased 6.0% from December 2010 to December 2011.

Despite price drops over the past few months, however, energy prices still have shown the significant yearly increases, with gasoline up 9.9%.  Overall prices have shown some stability in the past 3 months, however and even some limited declines due to decreased energy prices.  The overall price stability may not last, and positive statements throughout much of the media should be taken with a grain of salt until we see how the next few months shake out.


December Consumer Price Index Shows Inflation at...

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