The Consumer Price Index for All Urban Consumers, released Friday, "increased
0.5 percent in March on a seasonally adjusted basis ...[and] Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment ... the largest increase since December 2009. Gasoline and food prices continued to rise and together accounted for almost three quarters of the seasonally adjusted all items increase in March." And as we all know, "The gasoline index posted its ninth consecutive increase and has now risen 14.4 percent over the last three months." Furthermore, "The energy index has now risen 15.5 percent over the last 12 months, with the gasoline index up 27.5" for that same period. And while some of us might be able to alter our driving distances, skipping a meal is far less palatable. "The food index has risen 2.9 percent with the food at home index up 3.6 percent" for the past 12 months "... as all six major grocery store food groups
increased." New vehicles, used cars and trucks, and airline fares have also posted "significant increases."
With the exception of skyrocketing fuel prices, we can take some inflationary solace from the past four years. Using the inflation calculator at InflationData.com, the cumulative inflation rate from March 2007 to March 2011 was 8.82% with year over year rates as follows: 3.98% from 03/07 to 03/08, -.38% from 03/08 to 03/09, 2.31% from 03/09 to 03/10 and now 2.68% from 03/10 to 03/11. In this context, our current stats don't seem too daunting. That is, until we look at income and employment.
Reuter's reported today that "Unemployment rates fell in 34 states in March from February. Only seven states saw rates rise, while rates in nine states and the District of Columbia were unchanged, [according to] a Labor Department report..." Interestingly, Reuters also quotes Michael Ziesch, North Dakota's research analyst for the state's job service who said "[the state's] unemployment rate continues to post at less than half the nation ...Labor market gains are spread out amongst almost all sectors of the state's economy, and led by strength in agriculture and energy." And while these numbers are certainly positive, "The U.S. unemployment rate was 8.8 percent in March", and that doesn't include the long term unemployed whose compensation has expired and still can't find work.
Now that we've all hopefully filed our 2010 income tax returns, let's also have a look at available income figures for U.S. households. The most recent U.S. Census Bureau data indicates that household income has been nearly flat from 2007 through 2009 for the Lowest Fifth at $20.4K, Second Fifth at $38.5K, Third Fifth at $61.8K, Fourth Fifth at $100K and the Lower Limit of the Top 5% at $180K. It's also significant that while the mean (as in meaningless) household income for this period has been approximately $68K, the more graphic "median" household income has been about $50K. And for you income distribution wonks, the Household Share of Aggregate Income for this period across the quintiles (from lowest to highest) is 3.4%, 8.6%, 14.7%, 23.3 and 50% for the highest fifth which includes 21% among the top five percent of household income.
Although the economic recovery started in mid-2009 by most calculations, the above stats are even more sobering in light of an MSNBC report this morning from Dave Carpenter of the Associated Press describing "13 items that cost more, or will." Mr Carpenter cites "Airfairs, Chocolate, Coffee, Fast Food, Fruits and Vegetables, Furniture, Gasoline, Household Products, Insurance, Juice, Packaged Goods, Softdrinks and Tires." Add in "new vehicles, used cars and trucks" from the current CPI report and we don't need a degree in Economics to project that everything will soon cost more. Let's hope the recovery doesn't become as elusive as the middle class.
- William Busch