Thursday, July 2, 2009

Contrary Data

(click to enlarge)

The U.S Department of Commerce has a Bureau of Economic Analysis (BEA) which publishes a wide variety of useful data. One of the more useful collections is called “Personal Consumption Expenditures” (PCE). The PCE tracks 362 categories of items and how much people spend on those items.

For dairy there are two categories, “Fresh milk and cream” and “Processed dairy products.” Added together they pretty much cover dairy purchases.

As can be seen in the above graph expenditures rose and then, after September 2008 began to fall. The drop is actually less steep then it might seem and amounts to a drop of 4.7 per cent.

The Bureau of Labor Statistics keeps track of individual prices, and creates the Consumer Price Index (CPI). Lumping all dairy products together and comparing the same time period, September 2008 through May of 2009, the CPI data indicates an 8.1 % drop in prices.

This means consumers actually bought more dairy products in May 2009 than in September 2008.

You will please take note, this runs contrary to common expert opinion.

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