Grumpy Editor

With 'muted' inflation, seniors 2015 COLA: 1.7 percent

While growing inflation was indicated just four months ago, that "dragon" has vaporized with today's announcement that the 2015 cost of living adjustment (COLA) for Social Security recipients and others will be 1.7 percent, the fifth time in six years that the COLA was under 2 percent, notes Grumpy Editor.

Some seniors faced with higher costs in vital areas such as health care, utilities, car insurance, groceries and airline travel are raising eyebrows over the Bureau of Labor Statistics tally.

The 2015 COLA compares with increases of 1.5 percent for 2014, 1.7 percent for 2013 and 3.6 percent in 2012 following two years with no raises.

The BLS averages consumer price indexes from July, August and September to determine next year’s COLA for about 60 million Social Security and Supplemental Security Income recipients.

As recently as May there were indications of higher inflation.  That's when the BLS announced year-over-year gain in the consumer price index for the 12 months ended in April jumped to 2 percent.

A June 13 headline in The Wall Street Journal read:  Inflation "Dragon" Shows Signs of Stirring.  Two days later, Associated Press reported “evidence that inflation is ticking up from low levels.”

After the BLS released figures on June 17 that showed the CPI rose 2.1 percent over the prior 12 months, media reported indications point to “a burst of higher inflation.”

That’s when John Ryding, chief economist at RDQ Economics LLC, said, “we’ve got an inflation rate that’s been rising more than the Fed expected."

Those June reports came as an early indicator that Social Security recipients might get an improved COLA boost for 2015.  But, as with the weather, clouds suddenly began to appear on the horizon.

In July, the BLS said consumer prices rose 1.6 percent from a year earlier --- down from 2.1 percent it reported just a month earlier. 

Then in late August word was put out that most signs point to “benign inflation pressures.”

Going into September, media resurrected use of the long-used "tame" in referring to inflation.  At month's end, Federal Reserve Bank of Chicago President Charles Evans said inflation was "stubbornly low."

Inflation took a back seat last week when the "risk of deflation" phrase made a reappearance with reports of slowing global economic growth.

Social Security recipients COLA boost looming for 2015?

After several years using the term, it looks like print and broadcast media finally will be forced to shelve “tame” in connection with describing the inflation level as the latest year-over-year gain in the Labor Department’s consumer price index jumps to 2 percent, notes Grumpy Editor. 

It also means there is hope for Social Security recipients getting a larger cost of living adjustment (COLA) for 2015.  The COLA for this year was a modest 1.5 percent 

The consumer price index (CPI) rose a seasonally adjusted 0.3 percent last month from March as higher costs from food to energy pushed prices upward.  Meat prices, for example, last month posted the largest jump in 11 years. 

That puts the inflation rate at 2 percent through the 12 months ended in April. 

But, with most of Washington looking the other way when inflation is mentioned, one still has to be cautious.

Grumpy Editor points to a Nov. 18, 2010 posting in this space that mentioned a headline over an Associated Press story:  Consumer prices rise moderately but inflation tame. 

Important to observe will be CPI figures from July, August and September.  They will be averaged out to determine the COLA for Social Security recipients and others next year. 

Next inflation rate update is slated for release on June 17.

 

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VA WHISTLEBLOWER WEB SITE CREATED.   VAoversight.org is a joint effort of the Iraq and Afghanistan Veterans of America and Project On Government Oversight (POGO).  It gives whistleblowers the option of providing contact information and features bold-face warnings to avoid using a government computer or phone to submit complaints. “Whistleblowers shouldn’t have to go it alone. We can help whistleblowers hold the VA accountable, and keep the focus on solutions rather than attempts to hunt down those who voiced concerns,” said POGO Executive Director Danielle Brian.

 

IMAGINE, STRAIGHT NEWS REPORTING.  Heritage Foundation, Washington-based conservative think tank, on June 3 debuts Daily Signal a digital news site.  It will focus on “true, straight-down-the-middle journalism,” said Geoffrey Lysaught, Heritage’s vice president of strategic communications.

 

DOES ELEANOR READ NEWSPAPERS, WATCH TV NEWS?  During a discussion of Benghazi on “The McLaughlin Group” on PBS, liberal columnist Eleanor Clift declared U.S. Ambassador J. Christopher Stevens wasn’t really murdered but rather died from “smoke inhalation in a CIA safe room.”  Fellow panelists were quick to set her straight, pointing out Stevens’ death (along with three other Americans) stemmed from a terrorist attack.

 

FRENCH FOREIGN MINISTER SEES CLIMATE CHAOS BY LATE 2015.  The world has “500 days to avoid climate chaos,” French Foreign Minister Laurent Fabius warned in Washington. “I know that President Obama and John Kerry himself are committed on this subject and I’m sure that with them, with a lot of other friends, we shall be able to reach success in this very important matter,” added Fabius.

 

GANNETT BUYS TV STATIONS IN LONE STAR STATE.  Gannett Co., adding to its growing list of TV stations, agreed to buy six more from London Broadcasting Co. for $215 million.  All are in Texas.

 

NOW, WHICH AUTO WAS THAT?  During CBS’s “48 Hours” on Friday, FOUR auto commercials from different manufacturers ran in tandem.  This sort of thing, confusing viewers, never happened during earlier network days when only one commercial for an advertiser in its field ran during an hour.

Wall Street Journal likes proposed ‘chained CPI’; Newspaper revenue continues to decline in 2012

The Wall Street Journal jumped into the “chained CPI” fray with a Thursday editorial, neglecting the negative financial effect it would have on squeezed Social Security recipients and others, but backing President Barack Obama in replacing the traditional consumer price index with the “more accurate measure of inflation,” notes Grumpy Editor.

Switching the long-running traditional CPI with chained CPI --- short for the mouthful “chained consumer price index for all urban consumers” --- would reduce benefit increases to more than 60 million Americans receiving Social Security and Supplemental Security Income (SSI) monthly payments. 

As the Journal happily explains the chained CPI: “This alternative measure of purchasing power takes into account how consumers change their buying habits over time as prices change.  When oranges cost more, for example, people buy fewer oranges and eat more apples instead.” 

Sounds good.  But will that routine happen? 

Getting back to the oranges/apples illustration --- Journal editorial writers may be interested to know that at a local Kroger supermarket, oranges are 89 cents a pound with apples a dime higher. 

Will consumers really shift to cheaper substitutes?

Following that thinking, an updated CPI formula points to seniors switching, as examples, to bus transportation when air fares rise above the cumulus, or moving from a two bedroom apartment to smaller lodging --- or (worst of all) dropping a newspaper subscription in favor of checking the Web.

Print national advertising drops 15 percent 

Newspaper revenue continues to ebb, falling to $38.6 billion or 2 percent last year compared with 2011, according to the Newspaper Association of America. 

NAA notes advertising in printed daily and Sunday newspapers dropped 9 percent in 2012, according to data from 15 companies that provided detailed breakouts by category.

In various segments, adds NAA, retail advertising was off 8 percent, national advertising dropped 15 percent while classified advertising declined 9 percent.

Within the classified category, automotive slumped 9 percent, real estate fell 12 percent, recruitment declined 8 percent and all other classified edged down 5 percent, tallies NAA.

However, there are signs that the dips are starting to be made up by other sources, including digital subscriptions and digital advertising.

 

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CNN plans to bring back Crossfire in June…The New York Observer laid off 11 people from the business side of its overall media group on Friday, part of a sales team reorganization…Why print copy editors sprout gray hair: The Associated Press is making another change in its Stylebook, this time contracting under way to one word, underway…The Taylor family, former owner of the Boston Globe for more than a century until 1993, is mulling an offer to buy back the daily, along with the Worcester Telegram & Gazette, from The New York Times Co…Annual ritual continues:  Look for local TV news crews tonight to stake out Post Offices for video of late tax filers dispatching their envelopes to the IRS.

‘Chained CPI’ likely to see squeezed seniors grumbling; Associated Press bans use of 'illegal immigrant' term

“Chained CPI” likely will get little comment from most print and broadcast media on Wednesday when President Barack Obama’s budget plan is formally announced, yet, if initiated, the new formula for the annual cost of living adjustment (COLA) will negatively affect millions of older Americans receiving Social Security and Supplemental Security Income (SSI) benefits, notes Grumpy Editor.

The traditional consumer price index (CPI), long used in calculating the annual COLA, would be replaced by “chained CPI” that reduces yearly expected benefit increases. 

More than 60 million Americans receiving Social Security and Supplemental Security Income (SSI) payments would be further squeezed while facing higher costs for utility, gasoline, food, health-medical and most other bills. 

Recipients growled when this year’s COLA rose a modest 1.7 percent --- about half of last year’s 3.6 percent. 

In switching to a lower “chained CPI,” the Obama administration's thinking is growth of entitlement programs would be slowed. 

It assumes when prices of various items rise, consumers switch to cheaper substitutes, thus lower price tags.

 

AP scratches 'illegal' from Stylebook  

The Associated Press now bans the term, “illegal immigrant.”  In its updated Stylebook, followed by most news gatherers, AP mentions “use illegal only to refer to an action, not a person; illegal immigration, but not illegal immigrant.” 

So what is an acceptable variation? 

AP cites “living in or entering a country illegally or without legal permission.”  Except in direct quotations, AP adds, “do not use the terms illegal alien, an illegal, illegals or undocumented.” 

News folks who consult dictionaries may become confused.  Among definitions for illegal in one dictionary:  “A person who has entered or attempted to enter a country illegally.” 

What’s Homeland Security Secretary Janet Napolitano think about AP’s identification adjustment?  She tells reporters she didn’t “really get caught up in the vocabulary wars.”

 

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Social Security COLA for 2013: a modest 1.7 percent

The 1.7 percent increase in the 2013 cost of living adjustment (COLA) for seniors, announced today, means about 60 million Americans receiving Social Security and Supplemental Security Income (SSI) payments starting in January will be squeezed in keeping up with bills, notes Grumpy Editor. 

Latest COLA represents about half the 3.6 percent boost for 2012 that came after two years with no raises. 

That translates to an annual average increase since 2009 of only 1.3 percent, hardly enough to keep up with higher costs for utility, gasoline, food, health-medical and most other bills. 

The Social Security COLA is based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). 

Bureau of Labor Statistics (BLS) officials compare inflation in the third quarter with the same prior-year period.

Things could get even tighter for many retirees. 

Some of the 2013 increase could be wiped out by higher Medicare premiums --- to be announced later --- that are deducted from Social Security payments. 

Government projections indicate Medicare Part B premiums are expected to rise about $7 a month in 2013 from this year’s $99.90 for most seniors. 

Medicare covers services, such as lab tests, surgeries and doctor visits plus supplies (like wheelchairs and walkers) considered medically necessary to treat a disease or condition. 

The Social Security Administration says most retirees rely on monthly Social Security payments for 90 percent of their income.

Noteworthy this year is that today’s slim COLA for retirees comes exactly three weeks before Election Day.

Early numbers point to lower 2013 COLA for seniors

Seniors looking for a 2013 cost-of-living-adjustment on par with this year’s 3.6 percent COLA may be disappointed, sees Grumpy Editor. 

Media have been quiet on this outlook but the way things are shaping up, Social Security recipients will be lucky to get half that increase starting in January. 

Despite Americans getting hit harder in the wallet, especially with food and energy, the U.S. Bureau of Labor Statistics maintains consumer prices remained steady last month, continuing the long-heard line that “inflation pressures are contained” --- or “tame,” as the media like to describe it. 

Figures from July, August and September will be averaged out to determine the 2013 COLA for about 60 million Social Security and Supplemental Security Income recipients. 

BLS figures released last Wednesday show the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.3 percent over the last 12 months.  But for July, the index decreased 0.2 percent prior to seasonal adjustment. 

The CPI-W index for the third quarter this year vs. the like quarter last year is the key factor in determining the SS and SSI increase for 2013. 

Seniors can get another hint of the CPI direction with BLS’s release of August figures on Sept. 14.

 

Confusion continues on inflation: trending up or down?

So which way is inflation headed --- up or down?  With release of the consumer price index for April, confusion still reigns, notes Grumpy Editor. 

The headline on a May 15 news release from the Bureau of Labor Statistics read:

CPI all items unchanged in April as decline in energy index offsets other increases

Working off the BLS data, a Wall Street Journal story followed that with its own headline:

Inflation Eases as Gasoline Prices Fall 

The BLS lead spelled out, “On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers was unchanged in April after increasing 0.3 percent in March.  The index for all items less food and energy rose 0.2 percent in April, the same increase as in March." 

That’s where the confusion starts with words unchanged and rose in the same paragraph. 

As the WSJ pointed out, the CPI “measures what Americans pay for everything from breakfast cereal to doctor visits.” 

So that was heralded as unchanged, according to the BLS, from March to April. 

But then “core” prices entered the picture. 

The BLS news release indicated, “The index for all items less food and energy rose 0.2 percent in April, the same increase as in March.  Increases in the indexes for shelter, used cars and trucks, medical care, airline fares, new vehicles and apparel all contributed significantly to the April increase.” 

With that, the WSJ story added core prices “were up 2.3 percent from a year ago --- matching the biggest 12-month increase in this category since September 2008.” 

Now are you briefed on which way inflation is going.

 

AP, LA Weekly take different views of future media study

Grumpy Editor finds widely different versions of reporting by the Associated Press and LA Weekly yesterday based on the same University of Southern California study on the future of media.

AP’s Barbara Ortutay’s byliner focuses on the Internet, mentioning “most people don’t consider online content reliable” while LA Weekly’s Dennis Romero writes “the print product some of you like to pick up on your driveway every morning will go the way of the dinosaur within five years.”

Basing information on the study authored by Jeff Cole, director of USC Annenberg School’s Center for the Digital Future, AP’s version points out: 

“Last year, 15 percent of Internet users said they found only a small portion of online information reliable.”

Taking a different angle, LA Weekly summarizes the study with:

“Most print newspapers will be gone in five years.”

The Center says only four major daily newspapers would survive, naming The New York Times, USA Today, The Washington Post and The Wall Street Journal, adds LA Weekly.

USC’s Cole figures “the only print newspapers that will survive will be at the extremes of the medium --- the largest and the smallest.”

The latter include local weekly newspapers.

 

October Playboy magazine hits stands at 60 cents a copy

If looking for a bargain today, the October issue of Playboy can be plucked off newsstands for 60 cents --- matching the magazine’s price in the early 1960s --- or one-tenth of the usual cover price of $5.99, notes Grumpy Editor. 

It also illustrates the extent of inflation over the years.

The slashed price ties in with drawing attention to the debut Monday of the NBC series, “The Playboy Club,” a fictional drama set in the 1960s. 

With the latest issue, Playboy editors have styled the men’s magazine with a retro look matching 1961, the year when Playboy’s cover price was 60 cents. 

However, the initial issue of the magazine appeared in December, 1953 with a cover price of half a buck. 

The first centerfold featured actress Marilyn Monroe. 

The October issue contains a 10-page spread featuring original Playboy Bunnies who worked at the clubs that sprouted around the nation. 

Magazine and club founder Hugh Hefner was especially busy in the 1959-1960 period, kicking off Playboy’s first jazz festival, hosting a television show and opening the first Playboy mansion in Chicago. 

While the October issue will bring in less newsstand revenue, advertising pages are reported to be up 70 percent compared with the October, 2010 version. 

 

Consumer price index makes surprise jump in July

While heavy financial coverage in today’s newspapers focused on the battering the stock market took Thursday, with the Dow industrials down 419.63 points to 10,990.58, taking a back seat (or buried) was news that the cost of living made a surprise jump in July --- the most in four months, observes Grumpy Editor. 

Key media, echoing Washington, have labeled inflation “tame” in recent months. 

Consumer prices last month rose 0.5 percent, led by higher food and energy costs, reported the U.S. Bureau of Labor Statistics. 

It came in more than twice the rate that some economists expected and markedly higher than June’s 0.2 percent decline. 

Over the last 12 months, the all items index increased 3.6 percent before seasonal adjustment. 

The core inflation rate, excluding food and energy prices, was up 0.2 percent in July after two straight months of 0.3 percent increases.

On Wednesday, the Labor Department announced the producer price index (PPI), which measures price changes in goods before they reach consumers, rose 0.4 percent in July, the biggest increase since January.

For those following the consumer price index (CPI), the tally for August is slated to be released on Sept.15 at 8:30 a.m., EDT.