Did you see yesterday's news about the CPI? The Consumer Price Index for May for all goods and services was up 2.8 percent over the last twelve months. Much depends upon the magnitude of increase including the Fed's decision about the money supply and interest rates.
Less noticed is the breakdown by good or service. Much less noticed is the breakout of electricity prices (electric rates, in our parlance). But we noticed.
The CPI for May for electric rates specifically was up 1.0 percent over the last twelve months.
Since the overall CPI was up 2.8 percent and the electric CPI was up 1.0, the inflation-adjusted price of electricity fell significantly.
Drill down by region and you find the same trend, mostly. The overall CPI was up 2.7, 3.5 and 2.5 percent in the South, West and Midwest regions. But the electric CPI was up 0.5, 1.2 and 0.3 percent in these three regions respectively.
So the inflation-adjusted price of electricity fell significantly in the three regions. In other words, electricity has become more affordable for consumers across most of the nation.
The exception was the Northeast. There, the overall CPI was up 2.5 percent, equal or close to what it did in the South and Midwest. However, the Northeast's electric CPI was up 3.3 percent. So the Northeast's inflation-adjusted price of electricity rose significantly.
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Steve Mitnick, Editor-in-Chief, Public Utilities Fortnightly, and President, Lines Up, Inc.
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