CHANGE IN THE CPI

The Contrary Investor (contraryinvestor.com) is a great service for those who have about $100 to spend. The above chart shows why there is such confusion about the current CPI. Five percent of components are going down in price while most components have increased close to 2.5%. At the same time, a few items have increased at greater than 30%. The good news is that those items that have been increasing at 30% or more have since been dropping at almost 30% or more on an annualized rate. Therefore, the "core rate" numbers offer the best information in regard to inflation.