US Cost of Living Hits Record, Passing Pre-Crisis High

by Guest Thu Mar 17, 2011 11:14 pm

US Cost of Living Hits Record, Passing Pre-Crisis High

A special index created by the Labor
Department to measure the actual cost of living for Americans hit a
record high in February, according to data released Thursday,
surpassing the old high in July 2008. The Chained Consumer Price Index,
released along with the more widely-watched CPI, increased 0.5 percent
to 127.4, from 126.8 in January. In July 2008, just as the housing
crisis was tightening its grip, the Chained Consumer Price Index hit
its previous record of 126.9.
“The
Federal Reserve continues to focus on the rate of change in inflation,”
said Peter Bookvar, equity strategist at Miller Tabak. “Sure, it’s
moving at a slower pace, but the absolute cost of living is now back at
a record high in a country that has seven million less jobs.”
The
regular CPI, which has already been at a record for a while, increased
0.5 percent, the fastest pace in 1-1/2 years. However, the Fed’s
preferred measure, CPI excluding food and energy, increased by just 0.2
percent.
“This
speaks to the need for the Fed to include food and energy when they
look at inflation rather than regard them as transient costs,” said
Stephen Weiss of Short Hills Capital. “Perhaps the best way to look at
this is to calculate a moving average over a certain period of time in
order to smooth out the peaks and valleys.”
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http://www.cnbc.com/id/42130406