Econintersect: MIT’s Billion Prices project – which collects data from on-line retailers released their data through the end of Jun2011 showing the annual inflation rate at 3.73% which compares well to the BLS Consumer Price Index (CPI) rate of 3.6% (analysis here). This index is designed to provide real-time information on major inflation trends.
Online prices remained relatively stable during June, with a monthly inflation rate that fell until June 21st and then gradually increased at the end of the month. The annual inflation rate increased slightly to 3.73%, but remains in line with CPI estimates.
The interesting part of the correlation is the massively different data set being used. MIT’s Billion Points samples costs for goods (not services) on the internet – and its sampling base would be much less than 50% of the universe sampled by the BLS. Econintersect has previously shown a tight correlation between food prices only and the CPI (analysis here).
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