Faith Farm

CPI and Non durable goods

What is the Misery Index and why do we care about this?  The Misery Index is a measure of economic well-being, computed by taking the sum of the unemployment rate and the inflation rate for a given period. An increasing index means a worsening economic climate for the economy in question, and vice versa. In economic terms, a rise in inflation coupled with high unemployment leads to lower consumer expenditures and contributes to an economic slow-down.

The Current Misery Index is

High: 21.98% June 1980 9.68% May 2008 Low: 2.97% July 1953

It is one of the few ways (in my opinion) that economy is measured that has a real hint of what people are actually feeling. The misery index, as the name suggests, is designed to measure the amount of misery felt by ordinary people in the economy. Since fear of unemployment and loss of purchasing power through inflation have pervasive effects in the lives of ordinary Americans.  However--I believe the above numbers to be a bit off.  There was a very good article wrote back in May by Chris Isadore that in my opinion show a bit of reality to what these numbers actually should look like and explains some of why people are feeling the way they are---I have heard many economist and alot of media reporting "Americans are in a panic or over-reacting to the economy"----reality check time********  there is a reason for it.  When the cost of food and fuel keeps rising and jobs are lost or very insecure---people don't spend their money or they don't have any to spend.  I know the simplicity of that hurts most politicians.  But when the CPI (Consumer Price Index) only reflects 12% in food and fuel cost and core CPI (which economist love to use) doesn't count it at all..........thats just not reality in the lives of people or in business owners who are trying to keep people jobs.  You can read the artical here:

http://money.cnn.com/2008/05/13/news/economy/misery/index.htm?postversion=2008051410

Take a minute and figure out what percent of your income goes to food and fuel (all of it-gas, propane, heating and cooling, ect) and see if 12% is an accurate reflection in your monthly expenses.  By the way that 12%  also includes all non durable goods.  Non Durable goods may be defined either as goods that are used up when used once, or that have a lifespan of less than 3 years. Examples of nondurable goods include cosmetics, food, cleaning products, fuel, office supplies, packaging and containers, paper and paper products, personal products, rubber, plastics, textiles, clothing and footwear.  Now if you figure that number**********you get a better idea of how these numbers just don't reflect reality.  What is your Non Durable %?