EDITOR'S NOTE
So there's a fresh effort being made to come up with a crowdsourced, censorship-resistant inflation gauge. To quote from the contest page, "If inflation is a government-caused problem, we can't necessarily rely on government statistics like the CPI to diagnose or remediate it."
This goes back to what we were discussing yesterday about whether you can trust Fed officials who think core inflation will only be running around 2.5% by next year. As I mentioned, there are plenty of under-the-radar categories where prices have flattened or started to drop, like furniture and pet services.
You can comb through the CPI categories starting on page 9 here. For every category, like fresh fish, where prices rose 2% last month, there's a category like ham where prices dropped 1.5%. Canned fruits are up 0.9% from June in price, but dried fruits are down 0.6%. Linen prices sank nearly 3% on the month, while dishes and flatware dropped 2%. Men's suits were up 3% in price, but women's outerwear was down 2.6%. Sewing machine prices dropped 2%.
There is a lot of detail here, and the new inflation project freely admits that getting its own good pricing data will be difficult. Sites like Amazon block price scrapers to avoid losing web traffic to comparison shopping sites. A lot of manual work will have to be done to figure out whether the listed price of salmon is in pounds or not, for instance. Perhaps Amazon could uniquely contribute to such a project if they chose to do so, but otherwise it's heavy lifting.
And nowhere in the project does it mention what to do about the really hefty inflation categories like shelter, education, and healthcare costs. How on earth is any decentralized project supposed to track medical prices, let alone account for what share of them actually come out of the consumer's instead of the insurance company or taxpayer's pocket? And is there a decentralized way to aggregate the prices of haircuts, legal services, and funeral expenses?
There is a lot more to inflation than the components which generally get the most air time, or are most keenly felt to consumers because they are frequent, essential purchases (like gas and groceries). I would absolutely love to see a more transparent and trackable CPI report--it's just going to be really hard to create one.
See you at 1 p.m!
Kelly KEY STORIES
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Jumat, 13 Agustus 2021
The Other Inflation Data
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