US Government Inflation Data Is Wrong, But Not In The Way You Think: It's Already Below Fed Level

Many people are critical of the U.S. Bureau of Labor Statistics (BLS) inflation data and consumer price index (CPI), including economist Peter Schiff who recently griped about Netflix's membership fees going up by 15%.

#Netflix just hiked the price for its premium service by 15% to $22.99 per month. Before the 2020 pandemic the price was just $15.99 per month. That's a 44% increase in three years, or close to 15% per year. That's much closer to the real rate of #inflation than the official CPI.

— Peter Schiff (@PeterSchiff) October 18, 2023

Truflation, meanwhile, says inflation appears to be lower than the government-reported inflation rate of 3.4%.

The site — known for daily inflation tracking using real-time metrics— published its methodology, which includes tracking more than 10 million data points.

Between June and July of 2023, Truflation’s data showed that inflation was picking back up again before it was evident in CPI data. But now, Truflation’s data indicates that the U.S. inflation rate is actually below the Federal Reserve’s 2% level, sitting at 1.97%.
According to last month’s CPI report, inflation remains high in certain areas (i.e., eating out is up more than 5% year over year).

Groceries also continue to see inflation, up more than 2.5% year-over-year.

Other areas, like gas prices, have cooled down and are well off their highs. According to AAA, the national price for a gallon of gas is around $3.14. A year ago, it was more than $3.50.

Because most food prices and even rent (up 6% year over year) have remained elevated, the pain of inflation is still weighing on consumers. But, if Truflation’s data continues to show U.S. inflation around 2%, then we should see those numbers reflected in the CPI. It just may take a few months.

The report bodes well for President Joe Biden, who has been hyping up the economy ahead of the 2024 presidential election. According to the Commerce Department, the U.S. economy grew 3.1 percent over the past year, with core inflation moving back down towards the pre-pandemic benchmark.

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