Monthly Inflation Update

The latest annualized inflation rate is 2.11%.

The February 2011 Consumer Price Index for Urban Consumers (CPI-U) is 221.309. The annualized inflation rate computed from this number is 2.11%, which marks the 16th month of mild inflation after a streak of eight consecutive months of deflation. The annualized inflation rate is well below the 3.96% average since the end of World War II.

• For a comparison of headline inflation with core inflation, which is based on the CPI excluding food and energy, see this new feature.
  
  
• For a closer look at the sub-components of CPI, see this interior look at the data from the past three months.

The Bureau of Labor Statistics (BLS) has compiled CPI data since 1913 (BLS historic data). Our chart now shows inflation back to 1872 by adding Warren and Pearson's price index for the earlier years. The spliced series is available at Yale Professor Robert Shiller's website. This look further back into the past dramatically illustrates the extreme oscillation between inflation and deflation during the first 70 years of our timeline. Click here for additional perspectives on inflation and the shrinking value of the dollar.

Alternate Inflation Data
The ShadowStats Alternate rate of inflation is 9.62%

The chart below (click here for a larger version) includes an alternate look at inflation without the calculation modifications the 1980s and 1990s (Data from www.shadowstats.com).

Click for a larger image

As I've expressed elsewhere, my opinion is that the optimum method for calculating consumer prices is probably somewhere between the revised BLS method and the historic method preserved by Williams. However, government policy, the Federal Funds Rate, interest rates in general and decades of major business decisions have been fundamentally driven by the official BLS inflation data, not the alternate CPI. For this reason I think it best to take the alternate inflation data as a interesting, but not authoritative.