Wednesday, November 17, 2010

Consumer Price Index (Inflation) Update

File this under mundane, but the Bureau of Labor Statistics released October CPI numbers this morning they they are reporting a CPI-U of 0.2, which is to say a very, very small increase in prices.

This is a boring fact, but important in the broader discussion about what to do with the economy. We are teetering on price deflation at this point, which sounds good but in practice is bad. These numbers would also tend to lead credence to the Fed's planned quantitative easing. I've put you to sleep already, haven't I?

The bottom line is this, if people balk at certain remedies espoused to help our economy on the ground that they are worried about inflation, you can tell them they are ridiculous.

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