Friday, July 26, 2013

What's Up With Inflation? | Zero Hedge

 

Another way to track inflation is via households' actual spending as reflected in their budgets. Intuit collects anonymous spending data from 2 million users of Mint.com and posts the results: Presenting Inflation... the rise in expenses 2011 - 2013 (Zero Hedge). This data suggests the cost of daycare, healthcare insurance, kids' activities and tuition have skyrocketed in the past few years, making a mockery of the official annual inflation rate of 1.5% to 2%.

Chartist Doug Short recently published this graph plotting college tuition, medical care and the cost of a new car. According to the Bureau of Labor Statistics Inflation Calculator, $1 in 1980 = $2.83 in 2013. For example, the average cost of a new car in 1980 was $7,200, so the inflation-adjusted price in 2013 would be $20,376. The actual average price today is around $31,000, so after adjusting for inflation the current average price of a new car is higher than in 1980.

What's Up With Inflation? | Zero Hedge

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