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Median CPI Up 0.1% in October

Written by Gary North on November 21, 2013

The CPI, or consumer price index, fell 0.1% in October. But the Median CPI is a more reliable guide. It fluctuates less than the CPI. It provides a better picture of consumer price changes.

What matters is the trend. The numbers are disputed by a handful of analysts, who say that prices are rising. But these critics never publish the sources of their statistics and their rival methodologies. They do not let statisticians and economists see exactly why consumer prices are rising more rapidly. My advice: ignore all price inflation statistics that are not accompanied by publicly available methodologies.

The Median CPI is accompanied by public explanations. It is published monthly by the Federal Reserve Bank of Cleveland.

The trend of the Median CPI is toward lower price inflation. It is not yet price deflation. But prices are barely rising.


This leaves the Federal Open Market Committee lots of room to continue its quantitative easing policy of buying half a trillion dollars a year of long-term Treasury bonds and half a trillion worth of Freddie/Fannie bonds. The FOMC can continue to subsidize the housing market without fear of political repercussions.

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5 thoughts on “Median CPI Up 0.1% in October

  1. CPI is always “less food and energy.” I buy and consume food and energy every single day, making it the most important component. I would like to see CPI for food and energy, “less everything else.” And no, I’m not interested in excuses for not giving me this information. If I want to know the standard deviation, I can calculate it myself.

  2. Texas Chris says:

    Price the DOW in gold. The value of gold fluctuates only slightly, very slightly, and over long arcs of time. By pricing the DOW in gold you can chart the inevitable decline of the dollar.

    Another tip: When the DOW dips below the spot price of 1 ounce of gold, the US Dollar is dead. Be in gold at that point, because there is no putting the genie back in the bottle. Also, buy silver in a 16:1 ratio to gold. Historically this has been the most accurate comparison, and currently, with technology using so much silver, it may be more like 1:10.

  3. Gary, normally your articles are very insightful but I when discussing inflation you have totally missed the boat. At shadowstats.com they have been using 1980 methodology to calculate the current CPI the same way they calculated it then. The result is an inflation rate of around 9%. That website is superior in how it handles this issue, To ignore it is just stubborn. See http://www.shadowstats.com/alternate_data/inflati

  4. The problem with Shadowstats and similar things is that they imply the economy's real growth rate is negative, which is probably not true. If shadowstats is correct and inflation is about 5% right now, and the nominal growth rate is 2-3%, then the economy real growth rate would be about negative 2-3%. That conflicts with what we are seeing, which is low growth, but growth nonetheless. –ckr @ http://canadianmarketreview.com/

  5. Thank you for your reply. I would much prefer that you (or Gary North or whoever) would look for and attack perceived flaws in Shadowstats' methodology (or to be more precise, his calculations and graphs based upon 1980 CPI methodology) rather than dismiss them outright because you have difficulty with the implications. Cheers, JSF