11/16/2005

Consumer Prices Rise

Consumer prices rose 0.2 percent this month, primarily due to the rise in housing costs which were up 0.9 percent last month. The 0.9 increase is the largest increase since January 2001. Consumer prices have increased 4.3 percent this year while inflation is remaining at a steady pace of 2.1 percent. Gasoline prices have been favorable, falling 4.5 percent last month, helping to keep consumer prices from rising even more. Other prices also rose in October. Food costs increased 0.3 percent while medical care prices rose 0.5 percent and the cost of services increased 0.7 percent, the Labor Department said. With fairly small increases in consumer prices things should continue to balance out for the economy. With gas prices becoming more reasonable I’ll be spending less money throughout the rest of the year so there’s only one thing that can mean, it’s time to go buy my new snowboard and lift pass. As you can tell it takes very little for me to justify my purchases, but what the hell, at least I’m spending and helping stimulate the economy.

3 comments:

Connor said...

I don't think you are the only consumer that finds justification for wants versus needs as an easy thing. Surveys have showed that consumers tend to justify pleasurable expenditures, but constantly complain about being short-funded when it comes to commodities. Funny how that works. However, I totally agree with your attitude of "at least I'm spending and helping stimulate the economy." Spending is definitely vital for the progression of our economy.

pramahaphil said...

That is generally the point of capitalism, people seek to acquire commodities at the lowest price in order to purchase wants at whatever price is demanded.

Therefore I say buy your snowboard, and have a blast!

Dr. Tufte said...

Spoken like a true Keynesian, Bob.

More power to you, as long as you're making marginally reasonable personal financial decisions otherwise. The fact of the matter is that you can expect your real purchasing power to rise through your lifetime due to factors beyond your personal decisions. So ... go ahead ... steal a little from the future "rich Bob" to make today's "poor Bob" feel better.