DeflatorMouse

The press and the government keep talking about the core rate of inflation, inflation not counting food and fuel. To those of us who actually buy food and fuel this isn't too helpful. Fortunately the Bureau of Labor Statistics publishes full consumer price indices ('indexes' to victims of newspeak). And lots of other numbers.

http://www.bls.gov/cpi/#top

Note that there are tables for various metropolitan areas - the colored map at the right has a pulldown menu of cities like New York, Chicago, LA, the San Francisco-Oakland-San Jose area, and even such places as Phoenix.

Gratifyingly there is also an implicit breakout by class. There is a set of tables of the cost of living of "urban wage earners and clerical workers". Presumably this omits the heartbreaking price increases in the all-important yachts-mansions-private jets-servants sector. And the two can be combined. Non-yachts-and-mansions indices are available for the Bay Area, and even for Phoenix.

The non-yacht-and-mansion cost of living increases in the Bay Area the past three years were:

2005 2.6%
2006 3.1%
2007 2.9%

Applying these as deflators to the prices paid and current value of my index-fund-based ETF shares, those shares I have held since July 2005 have increased an adjusted 1.6% per year. Those held since September 2006 have decreased by 0.03%. The composite rose 1.3% per year. (I used to teach Excel, so I'm right.) And that is including today's 3.37% increase. Which means that all of the money I have gained in the past three years I gained today and will doubtless lose tomorrow. Feh.

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