Inflation has risen a little in America. The latest numbers show that the core consumer price index (CPI) is currently rising at an annualised rate of 2.8%. Janet Yellen, the chair of the Federal Reserve, says this isn't really worth talking about. It is, she says, not real inflation. It is just a matter of the data being a bit "noisy", thanks, it seems, to one-off rises in hotel-room costs and airfares. The analysts at Capital Economics don't buy this. It "seems odd", they say, to characterise the rise in core inflation as being noisy when it is "being driven by strengthening price pressures in areas as diverse as rents, medical care, clothing and new vehicles". The Fed, says Capital, "is being too complacent on inflation".
Bill Bonner doesn't buy it either. But in The Daily Reckoning, he notes that it is almost impossible for anyone in America to have full confidence in the official inflation numbers. According to the government, consumer prices are up 39% since 2000. But it's really very hard to find "any significant price that is up so little". Oil is up 314%. A dozen eggs is up 106%. College tuition is up 68%. Look at the Billion Prices Project, which monitors millions of products sold by online retailers, and the rate of consumer inflation in America is closer to 4% than 2% (3.91%). Not all of these price rises can be dismissed as noise indefinitely.
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