Consumer Price Index Report

The RISING price of consumer goods coupled with LOWER consumer wages has had a significant impact on the quality of life for many Americans. Social Security recipients are reporting difficulty in keeping up with RISING monthly expenses, since they have NOT received a Cost of Living Adjustment, or COLA, in 2 years now. According to the Senior Citizens League, 44% of those over the age of 65 have to choose between paying their utility bills and filling their monthly prescriptions due to rising costs.
The U.S. Bureau of Labor Statistics released its Consumer Price Index report (or CPI) for January of 2011. The Bureau tracks the rise or fall in the price of consumer goods, otherwise known as inflation or deflation. Inflation occurs when prices INCREASE, and deflation occurs when prices DECREASE. While the overall average increase, or rate of inflation, is officially 1.6% over the past twelve months, increases for energy and food accounted for more than 2/3 of the increase.

Gasoline and fuel continue their “strong” upward trend with the national average for gas reaching a 2-year HIGH of $3.17 a gallon. This is an increase of almost 20% in the last 12 months. The index for food consumed in the home posted its largest increase in more than 2 years, increasing by 2.1%.

All other items, besides food and energy, have increased by just 1% over the last 12 months, although many other sectors are starting to see increases in prices as well. For example, the price of cotton has risen to a 150-year high, more tha
DOUBLE what it was a year ago. This increase will obviously be passed on to consumers through increased prices on clothing – with a 10% increase expected this spring.

The cost of corn, which is used for both food as well as fuel, has DOUBLED in the past 6 months alone - from $3.50 a bushel to $7.00. Corn has many uses today, such as feeding cattle, pigs and chicken, which in turn feed America, and is used in chips, cereal and even sweeteners in most soft drinks. Corn ethanol has been added to much of our gasoline today, which then goes into our automobiles. The SUPPLY of corn is at its LOWEST level in more than 15 years, and the price is likely to continue to INCREASE, a cost that will be passed on to consumers in a number of different ways.

Ok, so you may be asking yourself, “Matt, what does all of this mean to me?” Now that we’ve “checked” the facts, let’s “balance” this news using our Checks and Balances process to determine what actio
YOU should take TODAY.