The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

Fed’s View Of Inflation Really Not So Super

On February 6th, 2012, posted in: Uncategorized by

Super Bowl XLVI is behind us.  Dieting lies ahead.  Consumption on football’s national holiday is somewhere between gluttonous and excessive.  The exaggerated picture of the crazed fan with food all over his face holding a roasted turkey leg in one hand and a stein full of grog in the other is really not as exaggerated as you may think.  Boy, do Americans love their Super Bowl Sunday.

Unfortunately, all the consumables lined up from table edge to table edge costs considerably more in 2012 than in previous years.  OMG!!!  Some of the “super” favorites are off the chart. Hot dogs are up in cost – hopefully, professional eating champion Kobayashi wasn’t on your invite list.  But tube steak is just one example.  When you finished setting out your spread, chances are you had considerably less “jack” than last year.

Yet, inflation is under control according to the Federal Reserve.  Really?  (They must not keep their receipts from this annual clash of the titans.)  This idea of very little inflation sounds like some funny math to me.  On my way to the grocery store to go broke, I filled up my tank at a whopping $3.39 per gallon.  Really?  Inflation is under control?

If you’re like thousands in the work force, you got “not much” in the form of a wage increase during the past year.  My guess is that the little increase you received got gobbled up along with those Lays Potato Chips on the table. The soda, the beer, the chips, the wings, the dogs, the burgers, the buns, the little smoky wienies, the relish, even the Doritos, cost more!  Not the Doritos – for God’s sake, say it ain’t so!

Rent is up, utilities are up, gas is up, food is up, medical insurance is up, tuition is up, and day care is up.  Everything that affects me and you is up, except the Federal Reserve’s calculation of inflation.  C’mon guys, call it like it is.

James Bullard, the St. Louis Federal Reserve Board President/CEO, gives a fairly optimistic view of the economy’s performance (with some exceptions) in his recent President’s Message found in The Regional Economist.  I get that Mr. Bullard takes a 30,000 ft. approach to his assessment.  He may want to come down from the clouds.  My perspective is a little narrower in nature.  What goes on in the community (from the SLCCU perspective) shows a little less optimism.

If we base our understanding of inflation on real wages in 2012 versus the cost of the goodies found on the kitchen table, coffee table, or TV trays, then the inflation rate in the current economy is forcing us to lose ground.

My definition of the economy deals a lot with regular folks’ wallets.  They’re emptier than in the past.  Maybe by next year’s big game, we’ll be the winners.  That would be super.

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