Article originally appeared on www.zerohedge.com.
As inflation remains painfully high for American consumers, the Consumer Price Index (CPI) is woefully inadequate in terms of reflecting reality.
(AP Photo/Pamela Smith, File)
For starters, CPI excludes several significant costs faced by households today – ranging from property taxes to soaring interest payments.
While price levels remain notably higher than before the pandemic, according to the CPI, inflation has slowed – reaching a 2.4% increase for the year ending in September. That’s only part of the picture, Bloomberg reports.
“The CPI is capturing the goods and services that you purchased for consumption, but there are things that affect your cost of living that are outside of that,” explains Steve Reed, a BLS economist. For instance, interest charges on rising consumer debt are largely absent from the CPI. Roughly $628 billion in revolving credit card debt now bears an average interest rate …
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