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To be slightly more correct, they only consider interest payments in calculations of inflation, since they consider the principle a recoverable investment.
by skzv 6y ago
To be slightly more correct, they only consider interest payments in calculations of inflation, since they consider the principle a recoverable investment.
- em500 6y agoIncorrect, see my sibling comment. It's strange that there are so many misconceptions around CPI, while the BLS has extensive layman-language docs about most their procedures https://www.bls.gov/opub/hom/cpi https://www.bls.gov/opub/hom/cpi
- skzv 6y agoThanks for the links. Looks like you're right, interest is not considered consumption. What is included is rent, or for owner-occupied residences, the "owners’ equivalent rent" - the figure which would be charged if the owner rented it out?
- em500 6y agoYes, OER is just asking owners "If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?"