Inflation is hitting my home--your's too !

I'm out on the stump today reading through data that has to do with consumer inflation. Although I'm not a high flying spender, I still need to forcast what my expenses are going to be in the coming year. I don't have a magic wand that I can wave over my bills every month and make them go away.

So today I googled up the latest consumer price index. It was for August 2005 and does not take into account hurricanes and other factors that will affect the September index.

So let's take a look at what it says:

Seasonally adjusted Un-
Compound adjusted
Expenditure Changes from preceding month annual rate 12-mos.
Category 2005 3-mos. ended ended
Feb. Mar. Apr. May June July Aug. Aug. '05 Aug. '05
All Items .4 .6 .6 -.1 .0 .6 .6 4.9 3.8
Food and beverages .1 .2 .6 .1 .0 .2 .1 .8 2.0
Housing .4 .3 .3 .2 .2 .4 .2 3.0 3.1
Apparel -.1 .5 -.7 .1 -.8 -.6 .8 -2.3 -.3
Transportation .8 2.1 1.8 -1.0 -.1 1.6 2.4 17.3 9.7
Medical care .6 .4 .3 .4 .2 .4 .0 2.1 4.0
Recreation -.2 .0 .1 .4 -.4 .0 .3 -.4 .7
Education and
communication .3 .1 .4 .0 -.1 .2 -.2 -.4 1.1
Other goods and
services .4 .0 .0 .3 .0 .7 .3 4.1 3.2
Special Indexes
Energy 2.0 4.4 4.6 -2.1 -.6 4.1 5.1 39.7 20.7
Food .1 .2 .7 .1 -.1 .2 .1 .8 2.0
All Items less
food and energy .3 .2 .1 .2 .1 .2 .2 1.4 2.2


Consumer Price Index data for September are scheduled for release on
Friday, October 14, 2005, at 8:30 A.M. (EDT).

As I suspected--things are going up in price faster than wages are.

In yesterdays "The Dallas Morning News", there was an article entitled "Consumers feeling bite of soaring cost of living". And by the way--why doesn't the index talk about cost of living in real terms. Ones that we can relate to as we get the items scanned at the checkout counter.

Tina Franco, a nurse was interviewed for the article. She says that she is spending $100 more per month now for auto gas compared to earlier this year. I would call that larger than the 20.7 % increase for the year in energy costs as shown in the index. Gas was $164.9 per gallon earlier this year and is now $3.00. I call that a near 50% increase in that energy area. I wonder what energy areas added up to the 20.7% increase?

The article went on to discuss other areas of consumer price inflation. Health care insurance premiums went up 9.2% this year and that was on top of the 11.2% last year. It has risen 73% since 2000. Only 60% of employers now offer healthcare insurance to their workers so we need to add this cost into our inflation in some form. Even of those employers who offer coverage [it has fallen 6% since last year], they still on average make the employee pay 26% of the premium. So the average worker now pays $2,713 for healthcare premiums. Medicine has also skyrocketed for those having prescriptions filled.I can attest to this.

In another report I read, home heating will go up 90% this winter. So either turn off the heat or dig deep into your pockets. Electricity rates are also climbing.

I always thought that fertilizer came from oil. If that is true, then food prices are bound to go up more than the 2% shown in the index. In fact due to transportation expenses, everything will go up because it costs more to get it here.

The index shows housing going up only 3.1%. How can that be. The cost of buying houses, apartment buildings, duplexes--are all going through the ceiling. Are they saying that the guy who just spent 2.5 million on an apartment building that was worth 1.5 milliom five years ago is not going to raise the rent!! Ridiculous.

The problem these indexs have is they don't offer up a forecast that goes down the line a year. If we need to plan our expenses, it would be nice to know what bread will cost next april! This brings me to an important point. With consumer confidence falling from 89.1 to 76.9 on the Michigan index [the largest monthly decline since 1978 [Jimmy Carter days]--I'm sure Walmart doesn't want the government issuing reports that will scare off holiday shoppers. By the way--what is a confidence index?

So as I sit on the stump here compiling all these figures, I'm convinced that I need to take some drastic action if I'm going to want to eat next april. That means keeping the heater off, walking more, fewer trips in the car, reading by candle light, and cutting back on holiday gifts.

I will all have to cut back my standard of living in order to pay for these higher prices. With wages raising at an annual rate of 2.3%--they are not going to cut the bacon.

I don't know how I'm going to break the news to Yodi that the heat will not be rising from the vent he has been lounging on. And that the snacks will be fewer and farther apart than normal.I also hope he likes pinto beans. There will be a lot more beans in the daily meals and less meat and cheese. We'll make it. We just need to plan and take steps to conserve what we use.Time to get out the sweaters and lap blankets. I also need to practice typing on a laptop using gloves.

Aren't "indexes" fun?

I wish I could solve my budget problems the same way the Feds do. If I could only print up money and offer an IOU to pay for it--I could then forget all these reports and go on pretending everything is rosy in the "Land Of OZ"

OK. Enough daydreaming about yellow brick roads. I'm doing one even better--praying more.