Well, look at the history of removing things like living necessities and increasing things that have dropped in price like TVs.

Calculation of CPI is deranged by the cherry picking of what they measure.

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amanaplanacanal 6 days ago | parent | next [-]

The basket of goods that they base the inflation rate on is created by surveying people and asking what they spent their money on. It's intended to reflect how households actually spend money. Not sure how that would be called "cherry picking". How do you think they should do it?

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Supermancho 6 days ago | parent [-]

> The basket of goods that they base the inflation rate on is created by surveying people and asking what they spent their money on.

What mechanism was that done through? The census or Walmart data?

I don't think anyone has seen a staffed table outside a retail store labeled "CPI Survey". This feels like an important question.

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tootie 6 days ago | parent [-]

The methodology and data is all publicly available. Just go to bls.gov.

https://www.bls.gov/opub/hom/cpi/

Every time I've seen someone talk about "real" inflation or unemployment they're just applying a different view on the same BLS data. Metrics like CPI or PPI are derived via a formula to create an indicator. A benchmark that should be apples to apples over a period of time. It's not meant to be comprehensive. But the comprehensive data is all there too.

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Supermancho 6 days ago | parent [-]

> Using 2010 census population data, we select the urban areas from which data on prices are collected and choose the housing units within each area that are eligible for use in the shelter component of the CPI.

> Participation in the Consumer Expenditure Survey is voluntary. However, when you participate, you are representing thousands of other households like yours. In order to be able to create quality statistics, we rely on the participation of those who are randomly selected.

i.e. Volunteer census data from self-reporters.

It is the census, but one step away from outright unreliable information. This doesn't engender confidence.

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amanaplanacanal 6 days ago | parent [-]

Do you have a proposal for a better way to do it?

	▲	Supermancho 6 days ago \| parent [-]
		Being as objective as possible and having worked for Experian, I will say yes. Americans, in aggregate, are one of the most monitored populations in the world^1. Financial institutions are painfully aware of the spending habits of Americans. I believe credit agency data, which is paired with monitoring bank accounts via social security tie-ins (that already exist), over census data. Integrate credit companies with social programs (like food cards) and you'll have a complete picture of the lowest brackets. ^1 China does better for specific demographics, but the rural populations are not tracked very well. I could also stand to be corrected for conditions in some very small countries.

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hshdhdhj4444 6 days ago | parent | prev | next [-]

> Well, look at the history of removing things like living necessities and increasing things that have dropped in price like TVs.

There are many different measures of inflation. And they serve different purposes.

Core inflation, which I suspect is what you’re talking about when talking about removing “living necessities” is a measure used to try and understand long term stable inflation. Since oil and groceries tend to be extremely volatile, core inflation removes those items. No one is saying it’s the one holy measure of inflation. If you’re trying to understand how prices have changed for the consumer over a period of time it’s not a useful measure at all, so you don’t look at core inflation for that purpose.

You look at other measures.

Also, weights are indeed a complicated issue, but is it really surprising the weight of TVs may have increased over a period of time when owning a TV has gone from being a luxury to a necessity?

But anyways, if you don’t like the weights that are used, the underlying segment breakdown is available on the same webpage that contains the summarized calculated inflation figures. Feel free to look at the segment inflation itself.

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XorNot 6 days ago | parent | prev | next [-]

What living necessities have been removed that you think should still be there?

The dataset inclusions are publicly available: https://www.bls.gov/cpi/additional-resources/entry-level-ite...

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hshdhdhj4444 6 days ago | parent | prev | next [-]

Here is an article by the St Louis Fed that describes at least 5 inflation measures and what the point of each one is.

https://www.stlouisfed.org/on-the-economy/2024/may/measuring...

Note, for example, only 2 of them even intend to measure price changes for individuals (CPI and PCEPI).

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tootie 6 days ago | parent | prev [-]

Not really and none of the underlying data is hidden. Inflation can vary across regions and industries and durability. Things like food and energy are in a separate category because they can fluctuate very quickly based on exogenous factors (ie bird flu) outside the control of monetary policy. That doesn't mean policy makers ignore them. They scrutinize the data at every level. CPI, core CPI or PCE are just convenient indicators.