Consumer Price Index

President Obama won't release his proposed budget for 2014 until Wednesday, but liberals and AARP have been howling all week about something they expect to be in it. What has our president done to provoke such outrage among his supporters? He's chained CPI. In an attempt to meet Republicans halfway in the battle over taxes and spending, Obama has offered to change the formula for calculating Social Security's annual cost-of-living increase - an "entitlement reform" GOP leaders have long asked for. The result would not change current Social Security benefits, but it would reduce future raises by an estimated three-tenths of 1% in the first year, or about $42 for the average beneficiary.

President Obama won't release his proposed budget for 2014 until Wednesday, but liberals and AARP have been howling all week about something they expect to be in it. What has our president done to provoke such outrage among his supporters? He's chained CPI. In an attempt to meet Republicans halfway in the battle over taxes and spending, Obama has offered to change the formula for calculating Social Security's annual cost-of-living increase - an "entitlement reform" GOP leaders have long asked for. The result would not change current Social Security benefits, but it would reduce future raises by an estimated three-tenths of 1% in the first year, or about $42 for the average beneficiary.

Prices paid by U.S. consumers for food, energy and other goods and services jumped in February for the third straight month, adding to inflation fears. The Labor Department reported that its inflation index increased 0.5% in February, driven by higher energy costs caused by the turmoil in the Middle East. Food prices also continued to move upward, with sharp increases in the costs of fresh vegetables and meats causing a 0.8% jump in the food index, the largest since July 2008.

Conservatives argue that Washington never cuts programs, it just increases spending on them more slowly than planned. But to recipients of federal benefits, that type of "cut" can seem just as painful. That's why there is an intense battle looming over a proposal to reduce the cost-of-living adjustments applied to numerous federal programs, including Social Security. The change is billed as a more accurate way to calculate the effects of inflation, but it's really just a way to make Washington's financial picture marginally brighter.

Of all the ways policymakers in Washington show they have absolutely no conception of how their tinkerings with the federal budget affect average Americans, one stands alone. That's the proposal to change the formula that determines annual cost-of-living increases for people on Social Security. At the heart of this particular change is an inflation indicator known as the chained consumer price index. You may have heard the term bandied about, along with the claim that it's more accurate at measuring inflation than the plain-vanilla versions of the CPI used today for inflation adjustments in Social Security, the income tax and other federal programs.

Before the Federal Open Market Committee decides what to do about interest rates Tuesday, investors will get news on whether there is any inflation at the consumer level. The consumer price index, which tracks prices Americans pay for goods and services, probably rose at a slower pace in April as world petroleum prices retreated from the year's highs, analysts said. The CPI is likely to have risen 0.1% during April after increasing 0.7% in March.

Like an uninvited drunken uncle, higher consumer inflation crashed the economy's growth party Wednesday. But it wasn't just higher energy prices that caused concern. Rising rents and higher prices for a wide variety of consumer goods, including prescription drugs, swimsuits and school books, were key factors behind a higher-than-expected 0.6% increase in consumer prices in April.

Everyone agrees that the consumer price index, the nation's most closely watched gauge of inflation, overstates annual changes in living costs, a miscalculation that skews federal payments and revenues while contributing significantly to budget deficits. A congressionally appointed commission headed by Stanford University economist Michael J. Boskin puts the error at about 1.1% annually. That may not sound like much, but 1.

An experimental consumer price index released Thursday showed that the lowest inflation rate in a generation might have been even lower than the official numbers reported, the Labor Department said Thursday. Using a different approach to analyzing the vast data that the department uses to measure consumer inflation, the report showed the experimental CPI rose 2.9% last year rather than the 3.3% reported officially.

Consumer prices rose a scant 0.1% in July, the Labor Department said Friday, adding to overwhelming evidence that inflation is being tamed by weak economic expansion. In a separate but related release, the Commerce Department reported that business inventories rose a meager 0.2% in June, the ninth consecutive monthly increase, but were held in check by a 0.4% increase in sales.

Consumer prices in the U.S. flattened out in June as declining energy costs offset an increase in the price of meat, vegetables and other food, the Labor Department reported Tuesday. The flat inflation reading helped put a little more money in the pockets of U.S. workers. Food prices rose 0.2%, but the cost of energy dropped 1.4% as electricity bills and prices at the pump eased. Excluding food and gasoline, the core consumer price index rose 0.2% in June. The core CPI is used by the Federal Reserve to help determine whether to raise or lower a key interest rate that affects the cost of loans to consumers and businesses.

Add slowing retail sales to the story of the payback for the warm winter weather. The Commerce Department said Tuesday that retail spending in April rose a tiny 0.1% from the previous month, seasonally adjusted. Details of the report made clear that the unusually mild winter had pulled some spending forward — resulting in a spring correction, as was also seen in job growth last month. A separate government report showed the consumer price index, after three months of increases, unchanged in April because of lower fuel costs.

China's inflation rate rose slightly in March, raising concerns about the government's ability to stimulate the economy should growth falter in coming months. Rising food and fuel prices helped drive China's consumer price index up 3.6% from the same month last year, China's National Bureau of Statistics said Monday. That was up from a 3.2% rate in February. China raised its retail prices for gasoline and diesel March 20 for the second time in six weeks, increases that probably contributed to the rising food costs.

WASHINGTON — Americans got some relief in October as the cost of living fell, mainly because of lower prices for gasoline, fruits and vegetables, the government reported. The Labor Department said Wednesday that the consumer price index dropped a seasonally adjusted 0.1% last month. The decline reduced the 12-month increase in consumer prices to 3.5% from 3.9% in September. The core rate of inflation, meanwhile, rose 0.1% for the second straight month, but it marked the lowest back-to-back increases of 2011.

Inflation in China moderated in September, but it remained stubbornly high amid growing signs of a global slowdown. China's consumer price index, the main gauge of inflation, was up 6.1% from a year earlier, down slightly from a 6.2% rise in August. Still, the index remains far above the 4% annual target set by the central government. That will make it difficult for China's central bank to loosen monetary policy to stimulate the nation's economy. There's already evidence that the world's factory floor is feeling the fallout from struggling economies in the West.

Of all the ways policymakers in Washington show they have absolutely no conception of how their tinkerings with the federal budget affect average Americans, one stands alone. That's the proposal to change the formula that determines annual cost-of-living increases for people on Social Security. At the heart of this particular change is an inflation indicator known as the chained consumer price index. You may have heard the term bandied about, along with the claim that it's more accurate at measuring inflation than the plain-vanilla versions of the CPI used today for inflation adjustments in Social Security, the income tax and other federal programs.

China raised its benchmark interest rates for the third time this year in a clear move to tackle inflation, which hit a 34-month high in May. The People's Bank of China said Wednesday that it hiked the rates 0.25 percentage points each, lifting the benchmark one-year lending rate to 6.56% and the benchmark one-year deposit rate to 3.5%. The move comes amid speculation that China's consumer price index, the country's main gauge of inflation, might have hit a three-year high in June.