What is the "real" inflation rate?

Reply Wed 6 Sep, 2006 01:36 pm
difficult to give a good answer to thomas without having more info - but , as parados pointed out - part of the difference might be in the cost of gasoline .
while gasoline is still a little cheaper in the u.s. than in canada , the difference seems to have shrank .
there is also the increase in the value of the canadian $ against the u.s. $ . i'm not sure how that is reflected .
we have noticed that groceries are now often more expensive in the u.s than in canada - i'm comparing eastern ontario against northern n.y. state here .
and here is a really strange thing that's been going on for a while .
we've noticed that particularly at 'zellers' - a smaller and older walmart style store .
they'll have specials on paper goods - paper towels and toilet tissue - much below the usual price in canada and in the u.s.
when i checked the boxes , i noticed they were labelled :
product of the united states - NOT for sale in the u.s. ... or : for EXPORT only !
with the appreciation of the canadian $ , imported groceries and other goods from all over the world have also become less expensive in canada . (seems that canada's "tough love' , meaning higher taxes , less government expenditures and increased exports is finally beginning to help the canadian $ ; particularly considering that canada had almost become a financial basket case . the canadian $ was worth only about 60 cents u.s. not that long ago and is now trading around 90 cents u.s. ) .

i also noticed that airline fares in the u.s. jumped by 12.6 % in the last 7 months . fares have also gone up in canada , but imo canadians travel less frequent by air than canadians - that's just anecdotal by reading a2k entries .

i'm not sure if that really explains the difference between the CPI and core CPI for both countries .

footnote ;
the confusion over the CPI rate arises to some extent because on business news it is ususally the 'core cpi' rate that's quoted ; uninformed listeners would not know that that's the rate without food etc . and would often assume that it is the 'total' cpi rate - a term not used regularly by commentators , i believe .

let's all be happy now Laughing :wink: !
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Reply Thu 7 Sep, 2006 12:01 am
Hamburger- Retirees in the USA get a yearly increase in their retirement checks called COLA. This COLA is based directly on the inflation rate.


Social Security benefit increases, also known as cost-of-living adjustments or COLAs, have been in effect since 1975. The 1975-82 COLAs were effective with Social Security benefits payable for June in each of those years; thereafter COLAs have been effective with benefits payable for December.
Prior to 1975, Social Security benefit increases were set by legislation.
Social Security Cost-Of-Living Adjustments Year COLA
1975 8.0%
1976 6.4%
1977 5.9%
1978 6.5%
1979 9.9%
1980 14.3%
1981 11.2%
1982 7.4%
1983 3.5%
1984 3.5%
1985 3.1%
1986 1.3%
1987 4.2%
1988 4.0%
1989 4.7%
1990 5.4%
1991 3.7%
1992 3.0%
1993 2.6%
1994 2.8%
1995 2.6%
1996 2.9%
1997 2.1%
1998 1.3%
1999 a 2.5%
2000 3.5%
2001 2.6%
2002 1.4%
2003 2.1%
2004 2.7%
2005 4.1%


Note the relatively benign rate for the last thirty years going back to 1975-1983. Four of those years were the disasterous Jimmy Carter years.
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Reply Thu 7 Sep, 2006 12:06 am
Chaplin- Note the COLA in my last post. You wrote:

BernardR, That's the first time I have seen that report by the congressional committee. The cumulative impact of the CPI on our economy is staggering - especially when combined with the actions of the feds with interest rates. Interesting article.

If you think the CPI is high now, look back at the Carter Years. Actually, the CPI, not counting this year(which is why the Fed raised rates) has been quite benign!!!
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Reply Thu 7 Sep, 2006 12:17 am
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canadian dave
Reply Sat 5 Sep, 2009 10:12 pm
I would have to say 10% as the absolute min.In the past 10 years prices have more then doubled.Food and housing have more then tripled,as have utilities(electricity,heating,cable etc.).Global warming taxes or fees have added at least 20%,directly and indirectly.I think a 10 year look is more accurate because it does not include unrealistic spikes such as oil,if you triple the price of something that does not have that value,then reduce (correct)it by 40%,this is still an increase.
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