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How does a thing called "consumer price index" exclude things like energy and food? How is that even close to honest? Friends of mine in CA with $1,000 PG&E bil

How does a thing called "consumer price index" exclude things like energy and food? How is that even close to honest? Friends of mine in CA with $1,000 PG&E bills. Food prices through the roof, $9 for a goldfish carton. But yeah let's exclude energy and food, because consumers - humans, don't require such things.

lotsofpulp 2y ago
It doesn’t. Multiple CPI figures are provided. If you want the one that includes everything, then use that one. > Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment. > The index for all items less food and energy rose 0.2 percent in July, after rising 0.1 percent the preceding month.
nightpool 2y ago
The CPI inflation rate gets lower when you include food and energy, not higher. OP simply chose the higher number (3.2) for the HN headline, not the most accurate one (2.9, which includes food and energy)
- hyperpape 2y ago
  You're half right. In a sense, food and energy should be included, but the problem is that they're much more volatile--you'd reliably have a huge surge of inflation in the US as gas gets more expensive in the summer, and deflation in the winter as prices go down. This would make it much harder to understand the numbers you were seeing. "Core inflation is 4%, which is high" is understandable, "Inflation is -1%, but that's actually bad because it's November" is going to make communication basically impossible for non-experts. I've always thought there ought to be a way to do some kind of damped average, so that you can detect "food has been rising in price for the past few years", but ignore "gas prices surged after memorial day", but it's hard to think through the details and find something that makes sense. Jobs numbers work the same way, btw...we adjust for seasonal labor.
  - nightpool 2y ago
    these are 12 month numbers
    - hyperpape 2y ago
      The implication that this avoids seasonal variation is accurate, but there are also other transitory supply shocks. I believe even accounting for seasonality, food and oil prices are more volatile than other items. Also, I may be wrong about this, but I'm not clear that you can easily do comparisons like "inflation has been X percent over the past 18 months" if you just do comparisons to 12 months ago.
deleted 2y ago
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LargeWu 2y ago
Food and energy are sometimes excluded because they are more volatile and susceptible to supply shocks that don't reflect underlying inflation.
kasey_junk 2y ago
Like all bls, fed, & dol there are multiple series that are useful for different discussions. The “headline” rate for CPI includes food and energy. And this is a national inflation number, of course there is variance by locality. Table 4 digs into some of that variance.

lotsofpulp 2y ago

It doesn’t. Multiple CPI figures are provided. If you want the one that includes everything, then use that one. > Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment. > The index for all items less food and energy rose 0.2 percent in July, after rising 0.1 percent the preceding month.

nightpool 2y ago

The CPI inflation rate gets lower when you include food and energy, not higher. OP simply chose the higher number (3.2) for the HN headline, not the most accurate one (2.9, which includes food and energy)

hyperpape 2y ago
You're half right. In a sense, food and energy should be included, but the problem is that they're much more volatile--you'd reliably have a huge surge of inflation in the US as gas gets more expensive in the summer, and deflation in the winter as prices go down. This would make it much harder to understand the numbers you were seeing. "Core inflation is 4%, which is high" is understandable, "Inflation is -1%, but that's actually bad because it's November" is going to make communication basically impossible for non-experts. I've always thought there ought to be a way to do some kind of damped average, so that you can detect "food has been rising in price for the past few years", but ignore "gas prices surged after memorial day", but it's hard to think through the details and find something that makes sense. Jobs numbers work the same way, btw...we adjust for seasonal labor.
- nightpool 2y ago
  these are 12 month numbers
  - hyperpape 2y ago
    The implication that this avoids seasonal variation is accurate, but there are also other transitory supply shocks. I believe even accounting for seasonality, food and oil prices are more volatile than other items. Also, I may be wrong about this, but I'm not clear that you can easily do comparisons like "inflation has been X percent over the past 18 months" if you just do comparisons to 12 months ago.

deleted 2y ago

[deleted]

LargeWu 2y ago

Food and energy are sometimes excluded because they are more volatile and susceptible to supply shocks that don't reflect underlying inflation.

kasey_junk 2y ago

Like all bls, fed, & dol there are multiple series that are useful for different discussions. The “headline” rate for CPI includes food and energy. And this is a national inflation number, of course there is variance by locality. Table 4 digs into some of that variance.