Friday, January 16, 2015

Breaking Down the Consumer Price Index


  1. Obamacare really helped decrease the inflation rate in medical care.

  2. Does anyone know the "rationale" behind housing at 41% of the CPI when the average rent is 30% of income, despite being well above the historic norm of 25%? This makes even less sense than I already thought it did.

    All that comes to mind is "owners' equivalent rent," a literally made up figure based on what people who don't rent their houses think they would charge:

    The process of elimination leaves only one other possibility: it's easiest to fudge that particular category, large as it is to begin with, in order to understate something highly inflationary, like medical care.

    But they'd never lie to us! Oh, wait...