We have some initial signs that the US economy is improving but the specter of inflation is still far away. The Federal Reserve has repeatedly said that they remain vigilant and ready to raise interest rates and remove the excess liquidity they injected into the financial system but for now, deflation is still the main threat.
MIT’s Billion Price Project attempts to measure and track an index of daily prices similar to the government provided CPI statistics. The difference is that the BPP index measures online prices for over 550,000 products sold by 53 online retailers and tracks them daily (instead of monthly). As online purchases become a larger and larger component of the economy, this will become a more and more accurate representation of inflation.
The project was started in 2008 and since then it has been tracking the CPI fairly accurately. But recently, the BPP has pulled ahead with a spike higher while the CPI has increased at a much slower rate:
Source: MIT Billion Prices Project
The project also tracks similar data for 70 countries including: France, Australia, Brazil, Argentina, Russia, and Turkey. For more information on the index and its methodology, check out the link above.