Friday, May 15, 2009

Inflation, We Need You

When his mom would leave the house shopping for a few hours, my toddler son used to go the window and yell out "Mommy, I need you!"

That's pretty much where our economy is right now: inflation has disappeared and we are wondering if and when it will come back. This morning the BLS released the April CPI, which (seasonally adjusted) was lower than March. The seasonally adjusted CPI has fallen month-to-month five out of the last seven months.

The chart below shows the seasonally adjusted CPI (blue) for 2008-9 and the seasonally unadjusted CPI (red) for the 1929-30 (sorry, no seasonal adjustment is available for 1929-30).

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