The website InflationData.com has a fascinating article, posted late last year, about media inaccuracies in covering that most highly technical of issues, the inflation rate.
"In October 2006 the annual inflation rate (CPI-U) was 1.31 percent, and it was 50 percent higher at 1.97 percent in November. Yet on the same day the data was released, Yahoo Financial News reported in an article entitled 'Stocks Rise on Inflation Data' that inflation was flat."
Perhaps the financial news media need to learn a bit more about how to report on inflation to crystallize the effect on the general public. A seemingly tiny rise in inflation in media terms can have a gigantic (sometimes catastrophic) impact on the average consumer. For example, gas price rises have been all over the news of late. But the media devote much less attention to how transportation costs--which are heavily dependent on gas prices--affect consumers.
I own horses and have been particularly troubled by a 50 percent rise in the price of carrots at my local grocery store in just two years. In the summer of '05, a 10-pound bag of carrots cost $3.99. This summer that same bag is going for a whopping $5.99. Similar increases are reflected in the costs for many fresh fruits and vegetables, all of which weigh a lot and are costly to transport. It just so happens that fresh produce is the sine qua non of a healthy diet, so if we all start eating more processed foods because fresh produce becomes unaffordable, we simultaneously drive up healthcare costs.
By Bonnie Erbe