Resources Research

Making local sense of food, urban growth, population and energy

The relative speeds of urban inflation

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How to read this chart. The light grey bars are the current month's CPI-IW (consumer price index for industrial workers) for each urban centre plotted to the left scale (the current data is for 2016 May). The green square marker is the reading for the difference between the current month's CPI and the average of the previous six months. The yellow square marker is the reading for the difference between the current month's CPI and the average of the previous 12 months. And the red square marker is the reading for the difference between the current month's CPI and the average of the year previous to 12 months ago. These are all plotted to the right scale, and their vertical separation helps tell us whether overall consumer inflation is rapid (or not) compared with other cities. You will find accompanying this chart a table. This associates a city code, such as ST21, used for the charting process, with a city: ST21 the city is Shimla in Himachal Pradesh. Data only (not method or treatment) are from Labour Bureau, Ministry of Labour and Employment.

How to read this chart. The light grey bars are the current month’s CPI-IW (consumer price index for industrial workers) for each urban centre plotted to the left scale (the current data is for 2016 May). The green square marker is the reading for the difference between the current month’s CPI and the average of the previous six months. The yellow square marker is the reading for the difference between the current month’s CPI and the average of the previous 12 months. And the red square marker is the reading for the difference between the current month’s CPI and the average of the year previous to 12 months ago. These are all plotted to the right scale, and their vertical separation helps tell us whether overall consumer inflation is rapid (or not) compared with other cities. You will find accompanying this chart a table. This associates a city code, such as ST21, used for the charting process, with a city: ST21 the city is Shimla in Himachal Pradesh. Data only (not method or treatment) are from Labour Bureau, Ministry of Labour and Employment.

Belgaum and Mysore in Karnataka with 12 points. Warangal, Telengana with 12 points. Panaji, Goa with 12 points. Munger, Bihar with 11 points. Bangalore, Karnataka with 11 points. Salem, Coimbatore and Coonoor in Tamil Nadu with 10 points. Rourkela, Odisha with 10 points. Sholapur, Maharashtra with 10 points. Vijayawada, Andhra Pradesh with 10 points.

Charting process codes used for urban centres and the cities they correspond with.

Charting process codes used for urban centres and the cities they correspond with.

These are not Swachch Bharat rankings nor are they ‘ease of doing business’ scores. They are, for each urban centre, the number of points its consumer price index (CPI) increased in May 2016 over the average for the previous quarter. The data is collected and distributed by the Labour Bureau, Ministry of Labour and Employment. This is one of the ways in which the monthly CPI numbers for industrial workers (a somewhat dated term which suited an era when the public sector dominated the economy, but which still relates to urban households) can usefully indicate the acceleration in inflation of household staples.

The picture changes when the CPIs of urban centres for a month (the latest available being 2016 May) are compared with their own averages for the last six months, the last 12 months or the year which ended 12 months ago. When the frame of comparison is the average of the previous 12 months, I find that in 30 of the 78 centres for which a CPI-IW is calculated, the increase is 10 points or more. Warangal in Telengana, Kollam in Kerala and Mysore in Karnataka are 16 points above their previous 12 month average while Munger in Bihar, Rajkot in Gujarat and Jamshedpur in Jharkhand are 15 points above.

This is the relativist picture that perhaps makes the most illuminating use of a monthly index, whatever its faults and shortcomings. The well-appointed chart that I have drawn helps show why the speeds and acceleration, between a current measure and an earlier set of measures, are more important to consider than the absolute numbers themselves. This is an experimental way to help visualise a subject that is alas rather dry but of great import for every single household. I will update this as new CPI numbers are released by the Labour Bureau every month.

Written by makanaka

July 23, 2016 at 22:25

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