Because energy prices fluctuate quickly on a number of other factors, particularly production volumes, independent of economic growth and conditions. Food prices, likewise, are vulnerable to weather fluctuations and closely linked to energy costs. Thus, food and energy are viewed as too variable to be a good economic indicator.

In this way the inflation index makes a good economic indicator, but is a poor measure of what that actually means for consumers.

Food and energy prices are naturally volatile and don't follow a natural pattern of price inflation.

So - they could provide a non-energy inflation figure, and an energy-included rolling average inflation price..

It's just to hide the damage to the economy that is being done. Energy prices are killing the economy as much or more than anything...the hidden tax of a devalued dollar due to "quantitative easing" that has effectively caused energy prices on the global markets to skyrocket...

As for following a "natural pattern of inflation" -- I beg to differ, I have been watching my food prices take a very steady climb up. There is no "volatility" in my food prices, otherwise they would occasionally drop back down again. For the past 4 years, food prices have just gone up and up and up.

"In this way the inflation index makes a good economic indicator, but is a poor measure of what that actually means for consumers. "

Nonsensical statement. Since consumer are the economy, anything that poorly measures what is happening to consumers can not accurately describe the economy.

By the 2% inflation number, you would think things are great....but since consumers are bleeding out at the gas pumps and the grocery store, they don't have free cash for home improvements and non-essentials.

+1 krellin. We can all watch the gasoline prices change from day to day, but my electric and gas bills don't bounce around, they just go up steadily. Farm commodity prices bounce a lot, but they've gone up steadily for years too, and you don't go into the grocery store and see a box of pancake mix for $2.99 on Monday and $1.17 on Thursday and $2.49 on Friday. Meat prices probably move the most, but again, there's a steady upward trend.

I'm not saying I think it's a good reason. But you asked why government economists don't include these measures. Having asked the same question myself of government economists I know, this is the reason I've been given.

But, to contradict your statement that "consumer are the economy" - consumers are in the economy, but given the degree to which business-to-business services and government contracts also make up economic activity, it would be a tad glib to contend individual consumers are the whole economy, or even at this point its primary focus.

Two things about CPI:

1. First, there isn't just a single measure of inflation. The BLS calculates several measures of CPI each month, including CPI-U All Items and CPI-U All Items Less Food and Energy. Most policymakers and news outlets just look at CPI-U Less Food and Energy because of volatility.

However,

2. CPI-U All Items is actually used for indexing purposes - treasury bills, COLA adjustments, Social Security payments, TIPS, etc. So what's reported by news outlets and the measure used to calculate payments and the official usage are two different numbers.

There isn't a great difference between the two, despite what krellin might think. CPI-U All Items was 0.8% last month, and CPI-U Less F&E was 0.4%.

But krellin, consumables vary base don availability. Energy and food are consumables. Durable goods are a better reflection of the economic trends. One day gas might be $4 per gallon and rop to $3.50 the very next day because something happened in the middle east. Likewise, dairy products and fresh produce vary based on the time of year because of growing seasons or the climate (cows produce less milk in a drought for instance).

Also, hecks, consumers are very much the majority of the economy. Current gdp is around $15.6 trillion, of which consumer spending makes up about $11.1 trillion compared to business spending of $2 trillion and government spending of $3 trillion.

@hecks - I would agree in part with your B2B assertion...except that business only participate in B2B activites when they have a consumer to sell a good or servive to to begin with. Without a consumer, there is no B2B...and even at that, when B2B involves the transport of goods, or the transport of a service person, this is energy costs.

I recently recieved a quote for a new garbage service because my old service went bankrupt. I was given a price on the phone and told, "There will also be a fuel surcharge..." but not told what that surcharge would be. The bill arrived, and the fuel surcharge was an addition 35% to the quoted cost!!! (Frankly, I think I'm being robbed blind, because the fuel surcharge for *every* home basically means they could drive back and forth to the dump after each home and still cover the cost of fuel...but since they now have essentially a monopoly...I have no choice but to pay...fucking thieves!)

Anyway...point is...energy costs impact essentially *every* business transaction in society, whether it is a consumer level transaction, or B2B. Even your non-physical product services - say your internet provider - is being hit with increasingly expensive energy costs for both electricity and repair dudes keeping the physical network intact and up to date. AND....energy costs increases were a *focus* and specific promise of Obama back before his *first* election...(just sayin'...he essentially promised to put coal out of business while never providing an alternate, *equivalent* replacement...)

In other words...our current economic problems....are by design.

Draug - like I said, you could provide a NON_Energy inflation number, and a Rolling-Average inflation number that includes energy adn consumables. Everyone with a household budget can estimate the increased cost of energy and consumable by looking at their check book. If I can do it...why can't the government report it?

"CPI-U All Items was 0.8% last month" Wow...was unaware of this number - don't here it reported on the business overview I listen to. 0.8% in a *month* is a *horrifying* number!!!

krellin, read what I already wrote you fucktard. They already provide both AND use the energy and food-included inflation measure for all legislation. God damn fucktard, learn to read.

2WL -- I hadnt' refreshed my page and didn't see your post yet, FUCKTARD. Fucking chill, bitch.

0.8% is *not* at all high. It was at 0.0% of *negative* half of 2012.

As YOU obviously replied to ME before comprehending my post which refers to yours, you illiterate douchebag!!

Too busy pounding your keyboard with your fists and shouting at your cats to read, huh, fucktard?

http://epicyearproject.files.wordpress.com/2011/04/jim-carrey-typing1.gif

0.8% in a MONTH is 9.6% annually. That is MASSIVE, retard!

Too bad it's not extrapolated on a yearly basis. Like I JUST WROTE, inflation was at zero or negative for half of 2012.

2WL are you talking to yourself again, retard?

You are slower than shit, or else your Packard-Bell and dial up internet is just too slow. Upgrade the connection in your trailer, half-wit.

2WL, you fucking illiterate, you did NOT say anything about 0% or negative in the same post as the 0.8% MONTHYLY number. God you are stupid.

AND...negative inflation is not good for the economy, either. Negative price pressure means lower profits for companies, which means not enough money to pay employees, which means lay-offs and firings.

But, to go from 0% to 9.6% annualized inflation is a *horrible* trend. If you can't figure that out then you are just beyond help.

2WL, since you can't even comprehend what you yourself have written, there is little point in continuing with you.

Perhaps you shoudl go back to your anger management class or go stroke of bo-sox or something to calm down.

Overall inflation was a meager 1.2% in 2012, a year in which it also happened to rise 0.8% in March. Look familiar to this year, maybe? Again, I stress learning to read.

Monthyly numbers are not yearyly numbers, fucktard

Forget learning to read, focus on counting!

I'd say you could count your teeth but you'd be better off on your fingers.