The REAL Inflation Rate? Alternative Measures Tell Different Story

November 19, 2013

What is the REAL inflation rate? 

Guest post by Dr. Ken Mayland,  ClearView Economics LLC

When we look at things that we actually buy, We get a different look at inflation...

When we look at things that we actually buy, we get a different look at inflation…

Measured inflation (the blue line) is quite low despite rampant money creation.  But is inflation being realistically measured? 

Perhaps the price of a McDonald’s Big Mac (the red line) would be a good price indicator.  A Big Mac incorporates wages, several commodities, rent, utilities, and transportation costs.  It costs have risen much faster than the official inflation rate.

Likewise, the PNC Christmas Price Index, (the green line) which costs out the items in the “12 Days of Christmas,” encompasses several different types of labor and commodity costs.  Again, those costs have increased considerably faster than the CPI (and interestingly, almost in line with the Big Mac Index).

If inflation is under-measured, then the “true” costs of living are being low-balled and our well -being is overstated.

Speaking of Precision:  Which any one on a fixed income can tell you is happening.

This is what we see when we go to purchase an item at the store for the same price, but get  less product.


4 More Reasons The Precision Machining Industry Is Recovering

September 29, 2009

The August 2009 PMPA Business Trends Report increased to 73 in August up 3 points from July, up 4 points from June, and up 8 points from the May 2009 low of 65.  Three months in a row of upward movement!

"Only three months in a row of non negative sales growth"

"Only three months in a row of non negative sales growth"

Three consecutive months of improvement. Or as one of my more pessimistic colleagues puts it, ” three consecutive months of sales not getting any worse.

We’ll prefer our positive optimism to living in his dreary outlook anyday.

Here are our latest reasons we believe that the precision machining industry has begun its recovery based on approximately 100 members participating in our monthly PMPA Business Trends Report.

  1. Three consecutive months of sales increases.
  2. Over half  52% of respondents reported sales increases, and one third reported double digit sales increases.
  3. Average length of first shift climbed again to 38.2 hours. 
  4. 63 % of responding companies reported 40 hour or more average length of first shift.

The shops reporting serve the Medical, Automotive, Aerospace, Heavy Machinery, Truck, Construction Equipment, Food Service Equipment, and Military Markets.

PMPA members can see the latest Business Trends Report here.

Bonus good news  about the economy from the Fed Open Market Committee per  an email from Dr. Ken Mayland, Clearview Economics:

“…economic activity has picked up…” versus last meeting on 8/12: “…economic activity is leveling out.”  Yeah!  The economy is now recovering (not recovered).

Picture credit : http://www.itsallabouteeyore.awoodman.net/

 

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