Hot Summer Inflation

Today will get above 96 degrees and will be the eight day to top 90 - add another 4 at 89 and you get one of the hottest summers on record with August yet to come. I don't want to even think about my July utility bill after looking at June's 30% dollar increase. Naturally as a business analyst, I wanted to see the detail reason for this inflationary variance - 5% usage; 25% rate based (I ignored the mix variance).

Economists continue to say there is no inflation and the economy is in deflation or de-leveraging. Well the consumer may be creating the image of deflation by not buying certain inventory (thereby creating excess capacity) but that is a direct result of job loss and/or individual pockets of inflation for the inelastic demand goods like utilities, gas, food, telecommunications, and yes---- cable (after all when you stop going out to eat - you stay home to watch TV).

I have been relentlessly reviewing the "little" pockets of monthly consumption - memberships, subscriptions, dues, credit card fees and finding places to save (maybe that is another form of de-leveraging). All of that is healthy for the economy because the consumer re-evaluates value for price across all substitutable domains.

So the economy continues to cool as the summer hot inflates.