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To: kvkkc1 who wrote (48515)2/8/2001 10:12:29 AM
From: GVTucker  Read Replies (1) | Respond to of 77399
 
The core inflation rate barely moved.

In 1999 the core rate of inflation was 2.0%

In 2000, the core rate was 2.7%.

That is a significant increase.



To: kvkkc1 who wrote (48515)2/8/2001 10:57:45 AM
From: Steve  Read Replies (1) | Respond to of 77399
 
The following table shows the significant increase in the core rate in the years 1997 to 1998 (when food and energy prices were falling) and then the increase in the overall rate as energy prices increased in 1999 and 2000. These price increases are still filtering their way into the core rate as the inflationary pressures find their way through the economy. The fall in the stock markets can be attributed partly to companies falling profits in the face of inflation as they were unable to pass along price increases.

You can see that the core rate increased from 1999 to 2000 at a faster rate than did the overall CPI. When core inflation is increasing it is cause for concern.

Year All Items Core Difference
1991 0.029784 0.043948 -0.01416
1992 0.029646 0.033816 -0.00417
1993 0.02809 0.031375 -0.00329
1994 0.025956 0.026537 -0.00058
1995 0.025965 0.029634 -0.00367
1996 0.032446 0.026332 0.006115
1997 0.01697 0.022076 -0.00511
1998 0.016069 0.024518 -0.00845
1999 0.026764 0.019373 0.007391
2000 0.033768 0.025713 0.008055