Alan Reynolds write:
Consumer Price Index (CPI) inflation has been at zero for two months. Over the past 12 months, food prices at home have risen 1.1% and energy prices have risen 1%. But the headlines continue to focus on the 12-month average of 3% for total CPI and 3.3% for “core inflation” (excluding food and energy). But there’s a big problem: these 3-3.3% figures do not reflect broad inflation measures, as they are primarily dominated by housing costs.
Widely criticized Bureau of Labor Statistics (BLS) Estimates of rents and owner-equivalent rents (prices that no one pays) account for one-third of the total CPI and more than 40 percent of the core CPI.
Reynolds points out that the extreme estimates of shelter prices are problematic for another reason: they lag behind reality by 12 to 18 months: Of course, because of the lag, we don’t know what shelter prices have been like in recent months.
But without housing prices, inflation was low. Reynolds writes:
Here’s the good news that isn’t being reported: In addition to the evacuation shelters, CPI Inflation and Core Inflation It has risen just 1.8% over the past 12 months and has been flat or declining over the past two months. (bold in original)
Of course, what he means is not CPI inflation or core inflation. Rose Over the past 12 months, CPI inflation and core inflation have risen by just 1.8%. was Over the past 12 months, it’s just 1.8%.
