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Tuesday, October 19, 2010

WHAT INFLATION?

I wish I lived in Washington, DC. It must be very inexpensive to live there. I say this because I noticed our rate of inflation dropped over the summer from 1.24% to 1.15%. The rate is calculated using the current Consumer Price Index as published monthly by the U.S. Bureau of Labor Statistics. The index is "a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services."

The Commissioner for the bureau is Dr. Keith Hall who manages a 2,500-person organization which is the principal fact-finding agency for the Federal Government in the broad field of labor economics. Translation, they're number crunchers. It is Dr. Hall's group that is charged with sampling the prices of consumer items and calculating the Consumer Price Index. I therefore presume they are sampling products from around the Washington, DC area which must be pretty cheap if the 1.15% inflation rate is any indication.

This is all well and good for Washington, DC, but I suspect the rest of the country is operating at a much higher inflation rate. For example, have the prices at the grocery store been going up or is it my imagination? Gasoline prices keep inching up as well. The cost of travel is up, as are utilities and other services, such as garbage disposal. I have a friend who owns a restaurant and complains he is now being charged $30 more per month to have his grease trap emptied. His produce bill is up as well. Even the Postal Service is again seeking a rate hike, averaging four percent to six percent, which would far exceed the "official" rate of inflation.

Dr. Hall, please send your minions to Palm Harbor, Florida and test our prices. We must be operating on a different wavelength than Washington, DC, and I suspect the rest of the country is as well. Don't insult us though by stating unequivocally that inflation is a mere 1.15%.

I will wager that the people who calculate our inflation rate are the same knuckle heads who recently claimed the recession was over in June 2009.

I'm sorry, but I'm just not buying it.

Keep the Faith!

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Tim Bryce is a writer and the Managing Director of M. Bryce & Associates (MBA) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at timb001@phmainstreet.com

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http://www.phmainstreet.com/timbryce.htm

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