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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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From: J_Locke	4/22/2006 1:46:22 PM
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Inflation is raging, at least if the Dog Grooming Index is any indication. My dog is seven years old. When I first started taking him to be groomed it cost $30. Over the next six years the cost gradually increased to $36, a compound annual rate of 3.1%, about in line with the "official" inflation numbers. Late last year the price went up to $40, an 11% rise. Today it had increased to $45, another 12.5% bump. That's a 25% increase in less than a year after a total rise of 20% in the previous SIX years. When I asked why the price had gone up so much, the owner said that she was getting killed by rising utility costs (i.e. classic push-through inflation.) I also suspect it's partly catch-up inflation, pushing prices when times are good to make up for no increases when the economy is soft. And with a local median home price of over 1.2 million, times are very good around here. Note this is the same grooming shop, same owner, same groomers, even some of the same dog washers.

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