http://www.cnbc.com/id/42130406
http://www.bls.gov/cpi/#tables
The February Consumer Price number was just posted. It stands at:
Feb 2011 = 221.309
Sep 2010 = 218.439
That's an increase of 1.31% in just five (5) months. Why is that important? The WH OMB has projected that it will only increase 1.3% for the entire year. If inflation continues to increase at this rate it will go up approximately 3.2% by September 30th, 2011.
But how can that be? The WH OMB has projected that inflation will only average 2.0% over the next decade and won't surpass 2.1%. Those projections are looking more ridiculous all the time. (But if anyone had actually checked for historical trends, they've looked pretty ridiculous from the first time they used them in the 2010 budget.)
Why is this important? Compounding! Compounding is the cummulative impact of rates over time. The lower the rates, the lower the adjustment factor for the later years. The higher the rates, the higher the adjustment factor for the later years. The factor for year ten of the 2012 budget is just 1.23. The factor for the last year during the period of runaway infaltion in the 70's - early 80's was 2.38. So understating inflation can have a very significant impact on the reasonableness of budget projections. And in this case they look like they're dramatically understated.
Why no one in the media, the public interest groups or Congress hasn't brought this up is beyond me. Maybe its "Emporer's New Clothes Syndrome"?
It looks like I may just have to go to DC and bring it up myself!
