The Investing Implications Of Price Creep

It is a fact that when distributions have thicker tails than the normal Gaussian distribution, trimmed-mean and other robust estimators do a better job of estimating central tendencies than simple averages. It is a fact that food and energy sector prices, especially, have deviations from the overall inflation rate that have much thicker tails than the Gaussian normal.

It’s hard to find much inflation in the US economy right now. As measured by the Labor Department’s consumer price index, prices increased by just 1.7% in 2012. The core CPI, which excludes food and energy prices, rose by 1.9%. Nor can much inflation be found in an alternate measure, the Commerce Department’s personal consumption expenditures prices index.

WASHINGTON — U.S. wholesale prices fell for the third month in a row last month, pushed down by falling food and gas costs. The drop is the latest evidence inflation is tame. The producer price index dropped 0.2 percent in December, the Labor Department said Tuesday. That follows a decline of 0.8 percent in November. The index measures price changes before they reach the consumer. Wholesale prices rose 1.3 percent in 2012, much lower than the 4.7 percent increase in 2011. Excluding the volatile food and energy categories, core wholesale prices ticked up 0.1 percent in December.

WASHINGTON — U.S. wholesale prices fell for the third month in a row last month, pushed down by falling food and gas costs. The drop is the latest evidence inflation is tame. The producer price index dropped 0.2 percent in December, the Labor Department said Tuesday. That follows a decline of 0.8 percent in November. The index measures price changes before they reach the consumer. Wholesale prices rose 1.3 percent in 2012, much lower than the 4.7 percent increase in 2011. Excluding the volatile food and energy categories, core wholesale prices ticked up 0.1 percent in December.

According to a report released today by the Federal Res

WASHINGTON — A spike in gas prices drove a measure of U.S. consumer costs up in February by the most in more than three years. But outside the gain in fuel costs, inflation was mostly modest. The consumer price index increased a seasonally adjusted 0.7 percent last month from January, the Labor Department said Friday. It was the biggest monthly rise since June 2009. Still, three-fourths of the increase in the index reflected a 9.1 percent surge in gas prices. That was also the largest monthly gain since June 2009. Gas prices had fallen in the previous four months.

WASHINGTON — The number of Americans filing new claims for unemployment benefits dropped for a third straight week last week, the latest indication the labor market recovery was gaining traction. Other data on Thursday showed a spike in the cost of gasoline pushed up producer prices last month, but the lack of broad price pressures gives the Federal Reserve scope to maintain its very accommodative monetary policy stance even as the job market strengthens.

WASHINGTON (Reuters) - Consumer pric