Consumer Price Index

The consumer inflation rate inched forward 0.2 percent in September, after an unchanged rate in August, with the rise led by higher clothing and medical costs, the Labor Department said today. A dip in transportation prices moderated the rise while prices in most categories of goods were unchanged, the department said. So far this year the consumer price index has risen at a 4.4 percent rate, the same pace of inflation reported for all of 1988. The figures were better than generally forecast.

The Consumer Price Index used to be something most of us simply took for granted, if we noticed it at all. Then, last December, a panel of economists appointed by the Senate Finance Committee claimed it wasn't accurate . . . that it ought to be adjusted . . . that maybe Congress should simply legislate a change. That set off a debate, that, just you wait, you'll be hearing more and more about this year. WHAT IT IS The Consumer Price Index - CPI, for short - is compiled by the U.S. Bureau of Labor Statistics.

M Session: Pa. House Environmental Resources & Energy meeting on imposing a tax on the extraction of natural gas. T Released: Nat'l Assoc. of Realtors' existing-home sales; Fed. Housing Finance Ag.'s home-price index. Session: Joint Conf. Comm. on "too big to fail" and more. W Released: Fed decision on interest rates; Commerce Dept.'s new-home sales. Session: U.S. Senate Finance Comm. on U.S.-China trade. T Released: U.S. Labor Dept.'s weekly jobless claims; Commerce's durable goods for May. Session: N.J. Senate Economic Growth Comm.

The federal government today brings the consumer price index out of the days of hi-fi and into the era of the compact disc. The Department of Labor spent two years and $43 million in an attempt to change the way economists measure the consumer price index, the nation's cost- of-living barometer. The new formula was used for the first time today. The theoretical "market basket" has been updated to include VCRs, smoke detectors, personal computers and other consumer cost "weights" that the government hopes will provide a more accurate gauge of inflation and price levels.

Are we in for inflation or deflation? The question continues to pester us as the economy wobbles. These sites explain the pitfalls of each, and how wary investors might guard against them. Buying power. The loss of money's buying power to inflation, and its increasing power due to deflation, are described here at Money-zine.com. Noted are the basic ways inflation is officially measured - via the Consumer Price Index, or CPI, and other price-tracking indexes. Can you invest to beat inflation?

Inflation erodes the purchasing power of money over time. Its effects on your life depend on how well your income and investments do keeping up. Take a look at these sites to see how you're doing. Digging the data. InflationData.com is a personal-finance site edited by Tim McMahon. It posts a current inflation rate, based on the government's Consumer Price Index for All Urban Consumers, of 2.65 percent. The site is rich in articles, charts and links on housing, employment, other economic matters that go into the cost of living, and calculators for doing some figuring on your own. www.inflationdata.com Grim calculation.

TRADE GAP SOARS The October trade deficit, which measures the gap between the value of U.S. exports and the cost of its imports, shot up 24.5 percent to a 2 1/2-year high of $11.61 billion, the Commerce Department said. Both the import and export bills posted record gains. Oil prices accounted for about one-fifth of the October deficit rise. The jump in the price of a barrel of oil to $29.04 from $24.31 in September pushed the oil import bill up to $7.2 billion, its highest level in nine years.

Consumer prices soared in January, climbing seven times faster than last year's inflation rate and helping to drive down real wages this year. The 0.7 percent jump in the Consumer Price Index was the biggest monthly increase in nearly five years and was fueled by sharply higher gasoline prices, the Labor Department reported yesterday. The department revised the way it figures the index to give more relative importance to services than in the past, as opposed to goods. At the same time, housing costs are given more weight in the index, while energy expenses and food costs receive less.

The meaning of yesterday's Boskin Commission report on inflation is that it challenges the common belief that real wages have been declining and that economic growth has been stagnant, according to economist Leonard Nakamura of the Philadelphia Federal Reserve Bank. "When people eventually look back on this period, they will think we suffered from a kind of mass delusion" brought on by misleading statistics, says Nakamura, an expert in inflation measurement. "People ought to feel better than they do. " The Boskin Commission found that the Consumer Price Index will overstate annual inflation by 1.1 percentage points for the next decade and recommended that the Bureau of Labor Statistics create a more accurate cost-of-living index on which to base government benefits increases.

The costs of food, energy and clothing drove consumer prices 0.4 percent higher in November, matching the fastest monthly pace this year, the government said yesterday. But analysts said the higher-than-expected inflation spurt was only temporary, given the economy's overriding weakness. The Commerce Department said last month's increase in the Consumer Price Index followed a tiny 0.1 percent advance in October and represented only the third time this year that inflation had risen so sharply in a single month.

Inflation erodes the purchasing power of money over time. Its effects on your life depend on how well your income and investments do keeping up. Take a look at these sites to see how you're doing. Digging the data. InflationData.com is a personal-finance site edited by Tim McMahon. It posts a current inflation rate, based on the government's Consumer Price Index for All Urban Consumers, of 2.65 percent. The site is rich in articles, charts and links on housing, employment, other economic matters that go into the cost of living, and calculators for doing some figuring on your own. www.inflationdata.com Grim calculation.

Are we in for inflation or deflation? The question continues to pester us as the economy wobbles. These sites explain the pitfalls of each, and how wary investors might guard against them. Buying power. The loss of money's buying power to inflation, and its increasing power due to deflation, are described here at Money-zine.com. Noted are the basic ways inflation is officially measured - via the Consumer Price Index, or CPI, and other price-tracking indexes. Can you invest to beat inflation?

M Session: Pa. House Environmental Resources & Energy meeting on imposing a tax on the extraction of natural gas. T Released: Nat'l Assoc. of Realtors' existing-home sales; Fed. Housing Finance Ag.'s home-price index. Session: Joint Conf. Comm. on "too big to fail" and more. W Released: Fed decision on interest rates; Commerce Dept.'s new-home sales. Session: U.S. Senate Finance Comm. on U.S.-China trade. T Released: U.S. Labor Dept.'s weekly jobless claims; Commerce's durable goods for May. Session: N.J. Senate Economic Growth Comm.

Worse-than-expected inflation data released yesterday stoked fears that soaring energy and housing costs may prompt the Federal Reserve to continue raising interest rates. The spike was fueled primarily by an 8.8 percent increase in gasoline prices. The Labor Department said its Consumer Price Index rose at a 4.1 percent annual rate over the last three months, higher than the Federal Reserve's tolerance range of 2 percent to 3 percent. In the Philadelphia area, consumer prices rose 1.2 percent in the March-to-April period compared with 2.0 percent in the January-to-February period.

For the last 25 years, the Federal Reserve has managed the nation's money supply as if there is a consensus that a little inflation - just a little - is a good thing. Now, with Chairman Alan Greenspan about a year from the end of his 14-year term as a Fed governor, some of his colleagues want to make Greenspan-era policy official by publicly setting specific inflation targets for the nation - even though Greenspan himself doesn't like the idea. Philadelphia Fed President Anthony M. Santomero and several of his colleagues say it is time to set a target inflation rate so investors, businesses and consumers will know more clearly how the Fed will react as the economy grows or slows.

Consumer prices rose by a modest 0.2 percent in April, but yesterday's government report still suggested that inflation is coming out of hibernation - especially in the Philadelphia area. The increase in the Consumer Price Index, the government's most closely watched inflation barometer, followed a sizable 0.5 percent increase in March. Economists were concerned because the so-called core rate of inflation, which excludes the volatile food and energy categories, went up 0.3 percent in April, slightly above forecasts.

Rising gasoline and grocery prices have gotten to Jeannie Waskiewicz. "I don't have as much money to blow," the Langhorne woman said during a shopping trip this week to the Cherry Hill Mall. Inflation is starting to hit home. Prices in the first quarter were up 5.1 percent on an annualized basis - and if that pace continues for the rest of the year, it would be the highest inflation rate in 14 years. The government will provide the latest snapshot of inflation today when it releases the Consumer Price Index for April.

Although the U.S. economy remains in the doldrums, inflation is suddenly a concern again - both nationally and in the Philadelphia area. The Consumer Price Index, the government's most closely watched inflation gauge, rose 0.3 percent nationwide in August for its biggest increase in four months, the Bureau of Labor Statistics said yesterday. The biggest gains were for energy, clothing and tobacco products. In the Philadelphia area, prices were up 1.1 percent from the end of June to the end of August, more than double the recent average of 0.5 percent for the period.

The government will start selling a new U.S. Savings Bond in September that is meant to protect investors against inflation as they save for retirement, college or other expenses. Starting Sept. 1, the Treasury Department will sell savings bonds indexed to the Consumer Price Index in denominations as small as $50. They will be issued at face value. Vice President Gore and Treasury Secretary Robert Rubin introduced the new savings bonds - dubbed I-bonds - in a ceremony yesterday.

Inflation has vanished, the economy is humming and consumers are more confident about their financial situations than they've been in years, economic reports released yesterday showed. In the Middle Atlantic states - Pennsylvania, New Jersey and New York - consumer confidence rose to the highest in more than eight years, since before the recession began in 1990. But a cautious Federal Reserve chairman Alan Greenspan still had a warning, telling Congress yesterday that "storm clouds" out of Asia made the future highly uncertain for the economy.