Real Rate Of Inflation In U.S. Is Near 10%

Paul Volcker

Paul Volcker

“Lies, Damned Lies and Statistics” comes to mind. John Melloy reports for CNBC First Money:

After former Federal Reserve Chairman Paul Volcker was appointed in 1979, the consumer price index surged into the double digits, causing the now revered Fed Chief to double the benchmark interest rate in order to break the back of inflation. Using the methodology in place at that time puts the CPI back near those levels.

Inflation, using the reporting methodologies in place before 1980, hit an annual rate of 9.6 percent in February, according to the Shadow Government Statistics newsletter.

Since 1980, the Bureau of Labor Statistics has changed the way it calculates the CPI in order to account for the substitution of products, improvements in quality (i.e. iPad 2 costing the same as original iPad) and other things. Backing out more methods implemented in 1990 by the BLS still puts inflation at a 5.5 percent rate and getting worse, according to the calculations by the newsletter’s web site, Shadowstats.com…

[continues at CNBC First Money]

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  • Marc

    I call bullshit. Yes of course if you factor in food and energy it looks bad but these are extremely volatile goods and are not reflected in CORE inflation, which has remained relatively low.

  • Marc

    I call bullshit. Yes of course if you factor in food and energy it looks bad but these are extremely volatile goods and are not reflected in CORE inflation, which has remained relatively low.

    • Dsiamm

      I call bullshit. Core inflation is NOT low.

  • Dsiamm

    I call bullshit. Core inflation is NOT low.

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