Morici: Moms Know Inflation, the Government Doesn't
NEW YORK (TheStreet) -- The typical American mom must think government economists have rocks in their heads. According to the number crunchers at the Labor Department, over the last year prices were up only 1.2%; for the month of November, inflation was zero, nada, zilch!
Surely economists don't eat, or at least shop where Mom does. Sliced bread and hamburger, staples in her family's diet, were up a lot last month. She faces higher health insurance costs and co-pays, thanks to Obamacare.
The government's Consumer Price Index tries to measure gains in prices across the entire economy, but that stat is only an average. Most Americans simply need some items more than others, and sometimes it is those necessities that rise the most.
For example, average consumer prices were flat in November largely because gasoline prices were down, but most of everything else was up. For the mom in Brooklyn who rides the subway to work, lower driving costs are not much help. Heating oil, which many families must purchase in New England, rose at a nearly 4% annual pace.Back to the food aisle. The price of steak was down but most moms don't buy much sirloin these days and must purchase about the same amount of hamburger each month. It may be great that restaurants catering to hedge fund managers got a break on bovine protein, but Mom can't mix a porterhouse to fashion a meatloaf to feed her hungry family. Over the last decade, many Americans have not had much in the way of pay raises, and some who lost their jobs have new ones that pay less or have no job at all. Even if inflation had been zero, they would be worse off.
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