The oft quoted site www.shadowstats.com says it all on the homepage – using pre-Clinton era CPI calculation methods, inflation is running north of 8%. This probably jives a bit better with your own personal observations of food and energy prices.
Suddenly a 5% savings account doesn’t seem so great. Add in the depreciating dollar (down 9% last year against a basket of currencies), and you need to be making 20% annually just to stay afloat.
More from John Williams at shadowstats.com – this may come as a shocker, but you can’t believe everything the government tells you:
“Politically, it is extremely important for the Bush administration to keep the monthly jobs changes on the plus side, because a down month or two could provide the timing base needed for the National Bureau of Economic Research to call a recession, and such is not wanted in an election year. As with the month before, the reported monthly payroll gain was statistically indistinguishable from a monthly contraction.
“Keep in mind that beyond the standard gimmicks, the Bureau of Labor Statistics simply can report any jobs number it desires. The current message from the reporting seems to be that the administration does not want to show a recession, but it would like Mr. Bernanke to ease further.”