Deflation Pulls Ahead – PracticalDad Price Index, July 2013

When it comes to the topic of inflation, central bankers are to pubescent males as the rest of us are to prim young girls who’ve been well-schooled by protective mothers: C’mon, it’ll be great. Everything’ll be fine since I’ve got experience with this. You want it and you know that you want it. What does your mother know? She’s so old-fashioned… But despite the conniving and constant wheedling efforts, July’s PracticalDad Price Index indicates that dear ol’ Mom has pegged the bankers with a cast-iron skillet. Both the Total Index and Food-only Indices (November 2010 = 100) have dropped from June’s figures. The Total Index – covering 47 separate items priced in three unrelated supermarkets – declined from June’s 107.65 to 107.57; however, the 37 item food-only index dropped steeply from June’s 113.55 to July’s 113.13 – almost a half of one percent in one month.

The results of the past four months are:

Month/Year          Total Index          Food-Only Index          Spread

4/13                      107.29                 113.46                           6.17

5/13                      107.64                 113.68                           6.04

6/13                      107.65                 113.55                           5.90

7/13                      107.57                 113.13                           5.56

The upshot is that for these items in the market basket, prices have risen 7.57% for all of the items and 13.13% for the foodstuffs alone.  Despite their best efforts, the central bankers are falling behind in their efforts.

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