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April 15, 2004

Return of Inflation

Remember inflation?

You know, that phenomena where increase in wages doesn't get you an increase in lifestyle, since all the prices are increasing.

It's back!

A lot of folks were excited a couple of days ago when retail sales jumped 1.8% in March-- a large number that gave hope of massive growth for the year.

But that's the raw growth number.

So yesterday the inflation numbers for March were released.

Consumer prices were up 0.5%- meaning that a significant chunk of the retail sales increase was just inflation.

And as I've noted here and here, even these numbers are likely understating inflation.

So don't buy the hype on the soaring economy. Friends who still are having trouble finding jobs is still a good indicator of serious problems in the economy.

Posted by Nathan at April 15, 2004 07:21 AM