Tuesday , 16 April 2024

Inflation: What Do the Non-CPI Inflation Gauges Say It Is? (+2K Views)

So writes Cullen Roche (http://pragcap.com) in edited excerpts from his article* entitled What Do The Independent Inflation Gauges Say?.

This article is presented compliments of www.munKNEE.com (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Roche goes on to say in further edited excerpts:

Here’s what all the independent inflation gauges have to say compared to the “official” CPI:

1. MIT’s Billion Prices Project 

According to MIT’s Billion Prices Project [Read: Real-time Inflation Data is Now Available – Finally] inflation is running about 1.7% almost perfectly in-line with the BLS:

2. ECRI’s Future Inflation Gauge

The ECRI’s Future Inflation Gauge is showing prices at a bit higher level. The index was up to 104 from 98.9 last December. That’s a 5.2% increase. Not exactly in-line with the BLS data.

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3. Orcam Housing Adjusted Price Index

The Orcam Housing Adjusted Price Index was at 2.84% on the month. That’s a bit higher than the BLS data, but not far off.

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4. Hourly Earnings % Increase

Meanwhile, hourly earnings are near their lows at just 1.7%:

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5. ISM Manufacturing Survey Price Level Increase

The ISM Manufacturing Survey showed a faster rise in prices to a level of 55.5 from 52.5 but it’s important to note that this is a diffusion index so prices are relatively benign when kept in perspective.

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6. GAO Food Price Increases

What about food prices? According to the GAO food prices are actually deflating year over year at a rate of -0.7%.

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7. Global Inflation

What about global inflation? They’re almost universally in a disinflation:

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8. Shadow Stats Alternative Index

Even ShadowStats, who has been wrong about hyperinflation for 5 years running [Read: Williams STILL Believes a Hyperinflationary Great Depression is Coming! Here’s Why], is registering their ShadowStats Alternate index at just above 5%. That’s certain to be on the high end of the inflation readings which means, even in the worst case scenario, inflation is about 1.5% above its historical average.

I think it’s healthy to remain skeptical of the BLS data. Their readings are definitely on the low end of the spectrum presented here but I think it’s also clear that they’re probably not far off from the true rates of inflation as most of these readings average out to something resembling the Orcam Housing Adjusted Price Index more than anything else.


All in all, the price data is fairly benign. Certainly nothing worth panicking over.

Editor’s Note: The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.


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