Official inflation measurements underestimate major costs for Americans

Official inflation measurements underestimate major costs for Americans. According to the Consumer Price Index, inflation in the United States is a benign 1.5%. However, the way this index is calculated underestimates many significant costs. Healthcare, tuition (especially for university), and daycare costs are all increasing at a much faster rate. Critics say that the current CPI index is flawed because it underestimates big ticket items or doesn't include them at all. For example, healthcare is 18% of America's GDP yet the CPI puts healthcare at 7% of a household budget. The CPI formula that was used in the 80s and skews more towards these large categories puts American inflation at 9%. The important point is that while the government sees inflation as low, consumers are still getting hurt by large prices increases. (VIEW LINK)


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