Saturday, March 23, 2024

Inflation is Up, but CPI is Doctored

Democrat campaigners say that the USA economy is much better than Pres. biden gets credit for.

Mark Hulbert writes:

Consumer borrowing costs in the U.S. have skyrocketed, but the CPI doesn't count this. ...

A new study takes exception to this anti-consumer narrative, finding that consumers are entirely justified in their gloominess. If inflation were measured correctly, the researchers argue, then it would be evident just how much consumers are hurting.

Entitled "The Cost of Money is Part of the Cost of Living: New Evidence on the Consumer Sentiment Anomaly," the study was conducted by Marijn Bolhuis of the International Money Fund and Judd Cramer, Karl Oskar Schulz, and Lawrence Summers, all of Harvard University, the latter the former Treasury secretary. The "anomaly" in their title is the unusually gloomy consumer.

Had the CPI fully reflected higher borrowing costs, it would have peaked at 18% in November 2022 and still be around 8%.

So inflation is only down because the changed the way the official figures are computed.

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