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CPI using 1980 and 1990 as calculation basis
Posted on 1/12/22 at 10:58 am
Posted on 1/12/22 at 10:58 am
The headlines are saying "highest inflation in 40 years! But in reality, it is the highest inflation since the 1940s if we use a constant metric for calculating.
LINK
quote:
The CPI chart on the home page reflects our estimate of inflation for today as if it were calculated the same way it was in 1990. The CPI on the Alternate Data Series tab here reflects the CPI as if it were calculated using the methodologies in place in 1980. In general terms, methodological shifts in government reporting have depressed reported inflation, moving the concept of the CPI away from being a measure of the cost of living needed to maintain a constant standard of living.
LINK
Posted on 1/12/22 at 11:25 am to TigerTatorTots
where are all inflation deniers from last year?
funny how so many run away once proven to be clowns
funny how so many run away once proven to be clowns
Posted on 1/12/22 at 3:04 pm to TigerTatorTots
That ShadowStats inflation is based on a basic mathematical misunderstanding:
No, the real inflation rate isn’t 15 percent
I honestly can’t believe anyone would believe that site’s nonsense since it’s not even plausible.
No, the real inflation rate isn’t 15 percent
quote:
But the creator of the chart, economist and Shadowstats founder John Williams, has admitted that he doesn’t actually re-compute the inflation rate using earlier methodology. He does something much cruder: he starts with the official inflation figure and adds a fudge factor that represents his estimate of how much the official consumer price index (CPI) understates the true inflation rate.
quote:
I’ve bolded the huge, gobsmacking error here: the word “annual.” That 5.1 percent difference between the CPI-U and CPI-U-RS indexes didn’t happen in a single year; it’s a cumulative change in prices over 31 years. To compute an annual rate, you have to divide 5.1 by the number of years over which the change took place.
quote:And the ironic and telling part of that ShadowStats website is that subscription price hasn’t changed in like a decade, despite believing there is “rampant inflation.”
Williams doesn’t seem to realize this. He thinks methodological changes reduced the measured inflation rate by 5.1 percent every year. This is akin to driving your car 2,000 miles during a 31-hour road trip and then concluding that the car was traveling at 2,000 miles per hour.
I honestly can’t believe anyone would believe that site’s nonsense since it’s not even plausible.
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