US annual inflation declines to 7.7% in October vs. 7.9% expected

There was no Anti-Inflation Act, there was a spending... SPENDING bill they claimed would lower inflation because it also included a very limited amount of deficit reduction which 1 week later they had spent like 3 times on new programs including the Student Loan Cancellation which reversed any inflation reduction the original bill could have had (which was nill in the first place)

Lack of low-wage immigrant labor to fill farm jobs. https://www.economist.com/united-states/2022/07/28/a-shortfa...

There are also TIPS which don’t pay as well but you get back 80-90% of inflation as a dividend

Some statistical gymnastics have been introduced over the years, with the apparent goal of getting lower numbers (COGI = cost of goods index, COLI = cost of living index):

> "Over the years, the methodology used to calculate the CPI has undergone numerous revisions. According to the BLS, the changes removed biases that caused the CPI to overstate the inflation rate. The new methodology takes into account changes in the quality of goods and substitution. Substitution, the change in purchases by consumers in response to price changes, changes the relative weighting of the goods in the basket. The overall result tends to be a lower CPI. However, critics view the methodological changes and the switch from a COGI to a COLI as a purposeful manipulation that allows the U.S. government to report a lower CPI."

https://www.investopedia.com/articles/07/consumerpriceindex....

It's comparable to excluding long-term unemployed people from the unemployment statistics to make that number look better.

In the early-1990s, political Washington moved to change the nature of the CPI. The contention was that the CPI overstated inflation (it did not allow substitution of less-expensive hamburger for more-expensive steak). Both sides of the aisle and the financial media touted the benefits of a “more-accurate” CPI, one that would allow the substitution of goods and services.

The plan was to reduce cost of living adjustments for government payments to Social Security recipients, etc. The cuts in reported inflation were an effort to reduce the federal deficit without anyone in Congress having to do the politically impossible: to vote against Social Security. The inflation-calculation changes had the further benefit to government fiscal conditions of pushing taxpayers artificially into higher tax brackets, thus increasing tax revenues. The changes afoot were publicized, albeit under the cover of academic theories. Few in the public paid any attention.

Katharine G. Abraham, then commissioner of the Bureau of Labor Statistics, laid out her recollections in an August 1996 paper:

“Back in the early winter of 1995, Federal Reserve Board Chairman Alan Greenspan testified before the Congress that he thought the CPI substantially overstated the rate of growth in the cost of living. His testimony generated a considerable amount of discussion. Soon afterwards, Speaker of the House Newt Gingrich, at a town meeting in Kennesaw, Georgia, was asked about the CPI and responded by saying, ‘We have a handful of bureaucrats who, all professional economists agree, have an error in their calculations. If they can’t get it right in the next 30 days or so, we zero them out, we transfer the responsibility to either the Federal Reserve or the Treasury and tell them to get it right.’”[v]

A further comment was noted in a 2008 San Francisco Chronicle article, “In the 1990s, for example, Republicans wanted to make changes in calculating inflation along the lines recommended by a special commission, including more use of quality adjustments. By lowering the official inflation rate, such changes promised to reduce the annual cost-of-living adjustments for Social Security and other federal programs.

“[Katherine] Abraham, the Clinton bureau [of Labor Statistics] commissioner, remembers sitting in Republican House Speaker Newt Gingrich’s office:

“ ‘He said to me, If you could see your way clear to doing these things, we might have more money for BLS programs.’ ” [vi]

Federal Reserve Chairman Alan Greenspan and Michael Boskin, then chairman of the Council of Economic Advisors, were very clear as to how changing or “correcting” the CPI calculations would help to reduce the deficit. As described at the time by Robert Hershey of the New York Times, “Speaker Newt Gingrich, Republican of Georgia, suggested this week that fixing the [CPI] index, with its implications for lower spending [Social Security, etc.] and higher revenue [tax bracket adjustments], would provide maneuvering room for budget negotiators …” [vii]

“Alan Greenspan, chairman of the Federal Reserve, is among the other Government officials who have spoken optimistically about financial benefits of a more accurate [CPI] index …” [viii]

“[E]conomists believe one of the most important [CPI upside biases] is when consumers shift their buying patterns in response to changing prices, substituting one product for another. The [CPI] index is based on a fixed market basket of goods and services. But, for example, if the price on an item like steak gets too expensive, consumers may switch to hamburger.” [ix]

The Boskin Commission Report, December 4, 1996, actually used steak and chicken for its substitution example. The examples used in arguing for changing the CPI clearly were tied to prices rising and resulting consumer demand shifting to a lower-quality product. Simply put, that was the destruction of the cost-of-maintaining-a-constant-standard-of-living concept and was the primary consideration of those seeking to change the CPI, although other issues would come into play. The drive here was as to get a lower inflation reading, irrespective of whether the data were “more-accurate.”

Reference: http://www.shadowstats.com/article/no-438-public-comment-on-...