Zero Hedge Watch

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)


Please sign in to comment on this wire.