Inflation is Down? What Are the Real Numbers and How Do We Access Them?

Inflation is outpacing wages. But the left wants you to believe “Americans’ wages are finally outpacing inflation.” (Fake News).

The Labor Department announced on Wednesday that the consumer price index rose 0.2% in July from the previous month, in line with expectations. But excluding food and energy, core Consumer Price Index came in at a 0.2% monthly rise and a 3.2% annual rate, “meeting expectations.”

Why would consumer goods and services – gasoline, groceries and rent – be excluded from the core CPI? Is that the same as California Governor Gavin Newsom backing out of the state budget the more than $1.5 trillion unfunded public employee pensions and long term healthcare costs? (Short answer… No).

The CPI is a measure of the average change over time in the prices paid by consumers for a “market basket” of consumer goods and services – goods like gasoline, groceries and rent.

If you factor in the CPI consumer goods and services, inflation is at least double what we are being told. But we already knew that.

CNBC reports:

Inflation rose as expected in July, driven by higher housing-related costs, according to a Labor Department report Wednesday that is likely to keep an interest rate cut on the table in September.

The consumer price index, a broad-based measure of prices for goods and services, increased 0.2% for the month, putting the 12-month inflation rate at 2.9%. Economists surveyed by Dow Jones had been looking for respective readings of 0.2% and 3%.

Prices climbed 2.9% from the same time last year, beating the 3% headline gain forecast by LSEG economists.

CNBC added, “A 0.4% increase in shelter costs was responsible for 90% of the all-items inflation increase. Food prices climbed 0.2% while energy was flat.”

And “Overall prices are up 20.2% since Kamala took office, according to a brand new inflation report.”

According to Forbes, because housing, food and energy are highly volatile areas of the economy, “Supercore inflation” deliberately ignores these to give a clearer picture of inflation – of the underlying price pressure.

Yet these very consumer goods and services are what consumers use to measure their personal inflation. These are what we are judged by with banks and credit agencies also because our long term debt matters. When the economy is in trouble, long term consumer debt increases.

“For example, when inflation spiked in June, the majority of the increase was due to the rapid rise in gas prices,” Forbes says. “When gas was removed from the final tally, core inflation dropped from 9.1% to 5.9%.”

Food and energy trade on open markets where traders use adverse events to justify moving prices up or down. However, it’s not always traders influencing these prices. These are commodities – like pork bellies and orange juice futures, if you remember Trading Places from 1983.

But we just want to know the bottom line – what is the total rate of inflation – the rate of inflation that we actually feel – and why all consumer goods and services have gone up so significantly?

What about the 7% mortgage interest? Or the increased cost of auto and homeowners insurance? In California, this has doubled in five years for consumers – that’s a 20% per year increase.

In California, high energy costs (doubled since last year) and gas prices (highest in the country), are self-imposed. California has not allowed a new oil refinery to be built in decades. Today California imports about 75% of the oil we consume. In 1982, California had 43 operational oil refineries and a population of nearly 25 million; today we have 11 operational oil refineries and a population of nearly 40 million.

California’s energy commission even recommended government control of the petroleum industry, clearly demonstrating their preference for socialism.

The Globe had a little fun and asked Grok – X/Twitter’s AI – “Why is food and energy backed out of inflation calculations?”

Wow. Wow. Wow. I’m done with Google research after this brilliant and thorough answer. It was as if I was lunching with Economists Art Laffer and Steve Moore!