Let's Vote on Inflation!

[TromboneAl]

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[FIRE'd@51]

Don't you mean 2007?

 

[MasterBlaster]

The gov't reported today that the CPI went up 2.5 % in 2006

http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20070118/REG/70118010

 

[OAG]

Voted 3%. Only because the BLS figures for the past 20 years (Oct-Sep or Govt Year) has averaged 3.07 or 3.1 with a high of 5.4% (1991) and a low of 1.3 (1999).

 

[Leveret]

Hmmm...so the cpi figure is 2.5% and most people are voting 3 or 4%.

Guess theres a little leeway in that "close enough" CPI calculation.

 

[donheff]

I went with 3% because I just got a COLA of 3.3% - based on the average annualized CPI-W for the third quarter of 2006 and 2005.

 

[mickeyd]

I inflated 3% and voted 4%.

 

[sgeeeee]

The gov't reported today that the CPI went up 2.5 % in 2006

Yeah. That's what the USBLS web site shows. They don't have specific regional data for Pheonix posted yet, so I'll go with the general US number.

 

[donheff]

Yeah. That's what the USBLS web site shows. They don't have specific regional data for Pheonix posted yet, so I'll go with the general US number.

Humm 2006 was 2.6 and I got 3.3. I hope the 3rd quarter of next year zooms. Then I can beat 2006's 2.6. I wonder why the Fed retirement system calculates based on the 3rd quarter of two consecutive years? Is inflation in the 3rd quarter higher than the rest of the year and did the congress critters take that into account?

 

[Bikerdude]

I spent 6.5% more in 2006 than 2005 but spent 5% less in 2005 than 2004. So much for following inflation. The above is just basic living expenses and excludes one time major purchases.

 

[Alex]

I see deflation.....

 

[OAG]

Donheff: The Govt year runs on a fiscal basis and they set it up years ago (like early 70's) to be 1 Oct to 30 Sep each year. This is also how Federal Budgets are also calculated, adding to the confusion. I believe the Congress set this sytem up this way so that they can go home and campaign in Oct for the elections (Cynical, but probably more true than false).

Of course this becomes too complicated for the media as they like simple things like a year (1 Jan - 31 Dec). I think they assume the public cannot understand FISCAL versus CALANDAR years.

CPI for FISCAL year was 3.3. CPI for Calandar year was 2.6. That 2.6 figure is due to inflation being lower for the last 3 months of the year (Oct to Dec) and being a tad higher in the last quarter of 2005 resulting in the lower figure.

 

[donheff]

Donheff: The Govt year runs on a fiscal basis and they set it up years ago (like early 70's) to be 1 Oct to 30 Sep each year. This is also how Federal Budgets are also calculated, adding to the confusion. I believe the Congress set this sytem up this way so that they can go home and campaign in Oct for the elections (Cynical, but probably more true than false).

Of course this becomes too complicated for the media as they like simple things like a year (1 Jan - 31 Dec). I think they assume the public cannot understand FISCAL versus CALANDAR years.

CPI for FISCAL year was 3.3. CPI for Calandar year was 2.6. That 2.6 figure is due to inflation being lower for the last 3 months of the year (Oct to Dec) and being a tad higher in the last quarter of 2005 resulting in the lower figure.

What I learned when I looked up the 2007 COLA rate was that for CSRS the COLA is NOT based on the 2006 fiscal year's CPI. It is based on the annualized average of the 3rd quarter in 2006 and the 3rd quarter of 2005. That seems like a strange approach to me. But it was the first site that came up in Google so maybe it was wrong.

EDIT: I just went and re-Googled : I either misread the first time or it was wrong. The COLA is set the same way as social security. It is based on the change in CPI from the 3rd quarter of the previous year to the 3rd quarter on the current year. SO it is just based on the Federal fiscal year.

 

[cute fuzzy bunny]

Interesting thread.

Many people agree that inflation is the thing they worry about a lot, then people line up to say that it has no influence at all on their spending or budgets.

I wonder why that is...?

 

[Alex]

Interesting thread.

Many people agree that inflation is the thing they worry about a lot, then people line up to say that it has no influence at all on their spending or budgets.

I wonder why that is...?

I think its because (normal) inflation takes such a long time to impact you. If the price of banana's goes from 1.00 a lb to 1.03 does it effect your banana buying habits? Over ten years however, those bananas would cost 1.35 or so (assuming 3% annual inflation). So you might be concerned, but you probably aren't going to lose any sleep over it.

PS- Hyper "South American" inflation is a horse of a different color. We have never experienced anything like that in this country and most people don't thing we ever will. If and when we do, I am sure attitudes would change.......