The CPI release this month features its usual aggregation and concludes that prices are rising 5% per annum. But take a look at specifics. If your main thing is driving around and burning fossil fuels, your compounded annual rate of price inflation over three months is a whopping and devastating 32%.
However, if your main thing is buying clothes and wearing them in a sporting way while staying on foot in the city, you are a winner: your 3-month annual compounded rate of price inflation is falling by 4.8%! But let's say you are mainly just into recreation, hanging around the arcades, watching movies, luxuriating on DVDs, bowling, or whatever. In this case, you would not see much price change at all over the last year: 0.3%.
Let's go even further. If you are a vegetarian, you are in luck: your purchasing power is rising because this stuff fell in price by 1.1.% since May. But if you live on milk and cheese, matters are different: prices rose 3.2%. Even in clothing, it's not that simple. Toddlers are suffering, while women are not. Renters who love liquor are in the black; non-drinkers who buy homes are in the red. And so on.
Oh, of course, if your thing is buying software, your purchasing power is nothing but up. If you are selling software, too bad for you: you are in a profit-crushing deflationary environment, but note how this hasn't seemed to harm the industry!
I draw attention to all this to underscore a point that Austrians have made since the turn of the 20th century: prices indexes are fictions, completely artificial. In their aggregates, they telling about nothing that truly exists.
