For all of 2005, the CPI increased 3.4%,about same as 2004's 3.3%

[papau]

http://www.marketwatch.com/news/story.asp?guid=%7B619D2167%2D7AFD%2D49B9%2D989F%2DD19B017AD531%7D&siteid=google&dist=

WASHINGTON (MarketWatch) - U.S. consumer prices fell a surprising 0.1% in December as energy prices continued to drop off from the spike in September, the Labor Department reported Wednesday.

It was the second straight decline in the consumer price index, which fell 0.6% in November.

Core prices - which exclude food and energy prices - rose 0.2%, as expected, for the third month in a row.

Economists were expecting the CPI to rise 0.2% in December, according to a survey conducted by MarketWatch.

For all of 2005, the CPI increased 3.4%, not much different than the 3.3% increase in 2004. It was the largest yearly gain since the 3.4% increase in 2000.

[depakid]

1. LOL- I'm sure it did

Now, let's all guess what the actual rate of inflation was last year. I reckon it's closer to 8%.

[umass1993]

2. I don't know why inflation

is so hard to calculate. I figured out the "right" way by myself.
You simply do a weighted average of all the price changes for every product and service.

You weigh the percent increase in price of a product by it's market share.

it may seem hard to do all goods and services, but WalMart could probably give an excellent inflation rate for consumer goods. Everything is in a database now.

I am sure it wouldn't be difficult to get rates for services. Hell, we could even include the street price of crack cocaine into the formula.

Why this isn't the standard policy, is beyond me. It seems to be the first calculation that an economist would want to do.

[sendero]

3. Since various entitlements..

... are indexed to the official CPI, the government has a vested interest in making it come out low, and they do that quite well.

They do so by underweighting the fast-rising components of the CPI, and overweighting the slow-rising ones.

Inflation, as manifested in the purchase power of the average American, is running around 7%.