Mike (Mish) Shedlock | Nov 13, 2020 02:29AM ET
The BLS reports 0.0% inflation in October vs 0.2% expectation. Year-Over-Year inflation is allegedly up 1.2%
The BLS CPI Report says that nets to zero.
The BLS does not directly include home prices in the CPI. The latest Case-Shiller home price index is up 5.7%.
Instead of using home prices, the BLS uses Owners' Equivalent Rent (OER). OER is determined by asking homeowners how much they would expect to pay in rent if they rented their own house from themselves.
Ask anyone looking to buy a home what inflation looks like.
Failure to properly account for housing has distorted the CPI continually from 1998 until now.
The Fed did not spot the housing bubble nor predict the Great Recession because it did not understand the asset bubble.
The BLS says the cost of medical care is up 20% from a year ago.
As anyone buying their own health care how accurate that is. Also ask anyone buying their own health care if it is only 6.97% of their budget.
The stock market and risk tolerance is also a measure of inflation. It is nowhere to be found in the indexes.
Add it all up and the CPI is a gross distortion of reality on many fronts.
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