By John Romano

(YBH) – Introducing the YBH! Daily Living Index (DLI).  The DLI is a simple weighted average of the prices of select commodities, the cost of which directly affect Americans’ daily activities.

The index will feature a mix of commodity futures prices from FCOJ (if you’ve ever seen the movie “Trading Places” you’ll know this one), wheat, cotton, soybean oil, canola, soybeans, cattle, cattle feed, live hogs (not pork bellies!), lumber, heating oil, gasoline, wool and others.

Each commodity is weighted based on our analysis of the product’s importance to daily living.  For instance, while coffee is important to enjoying your life (and especially mine!), gasoline may be essential for you to get to work.  Likewise, the price of gold is an important measure of economic stability and a hedge against inflation, but it isn’t as important to you or I on a daily basis as is cotton or wheat.

For reference the YBH! Daily Living Index is backdated to December 22, 2009. The beginning date marks about one year after President Obama is in office, and we also presume reflects the effects of both the Obama stimulus and the Bush banking measures having worked through the system a bit.  It seemed like a good place to start.

So. On December 22, 2009, the YBH! DLI stood at 165.35.  Yesterday, our first daily measure, it was at 239.69.  In about a sixteen month period, the price of commodities grew 45%.  Staggering.  That figure is much higher than the official inflation figures released by the government during the same period.  According to the government, inflation hasn’t been an issue during this period.

Actually, my idea for this index was born out of my frustration with the way the government measures “core” inflation.  Surprisingly, the Bureau of Labor and Statistics ignores the price of gas and food when measuring “core” inflation.  The actual reasons for this may be political or pragmatic.  Or maybe bureaucratic. However, none of that matters to you or I when we go to the gas station to fill up or buy a gallon of milk at Safeway.

We at YBH! suggest you use the number as a measure of where the goods and services we use are headed.  Lower commodity prices will eventually lead to lower prices at the pump and department store.  Unfortunately, as we have all seen over the last two years, the reverse is also true.

Welcome to the YBH! Daily Living Index page.  The index will be updated each business day after the closing bell, using commodity prices from a major financial news outlet.

So to kick off:  the YBH! Daily Living Index for April 19, 2011 was 239.69.

• April 20, 2011 – 239.50
• April 21, 2011 – 241.02
• April 25, 2011 – 242.96
• April 26, 2011 – 242.18
• April 27, 2011 – 241.41
• April 28, 2011 – 236.76
• April 29, 2011 – 241.10
• May 2, 2011 – 238.79
• May 3, 2011 – 236.02
• May 4, 2011 – 234.52
• May 5, 2011 – 226.91
• May 6, 2011 – 226.97
• May 9, 2011 – 231.43
• May 10, 2011 – 232.98
• May 11, 2011 – 227.90
• May 12, 2011 – 226.55
• May 17, 2011 – 228.23
• May 18, 2011 – 234.65
• May 20, 2011 – 233.70
• May 23, 2011 – 232.14
• June 2, 2011 – 235.13
• June 14, 2011 – 231.80
• July 25, 2011 – 228.75