CPI

In reviewing my prior post, many low information Americans will point out that the CPI hasn’t risen that much so inflation isn’t as bad as my post infers.

Our government provides a CPI (consumer price index) that purports to prove inflation isn’t that bad. However, one simply needs to look at the things not included to understand the misleading nature. What’s not included? Well, food and energy. Why are they excluded?

The thinking is that these items are volatile and would result in wild swings in this index leading policymakers to make decisions based upon the short-term spike in the index. Further, the commodities underlying food and energy are included in the prices of items in the index so they will appear over time in the index’s value.

This is why the people often feel the index is out of touch with the reality they are experiencing at the pump and grocery store.