FAST FIVE: Chief Economist: Real Inflation Is Now In The Double Digits And Pain Is Coming
For example, government statisticians now employ an arbitrary and non-market price for owner's rent, removing actual housing prices from the calculation.
Other substantive changes in the CPI occurred in the mid-1990s following the Congress-sponsored Boskin report, which purportedly shaved 50 to 100 basis points off of reported core CPI each year.
Adjusting reported inflation for those exclusions or changes would result in double-digit gains in both headline and core CPI for the past twelve months.
These price measures are misleading as they eliminate the tails in the distribution of prices.
Once inflation cycles start, they gain momentum on their own.