A post published by Ritholtz.com on Oct. 27 challenged commentators who emphasize core inflation, using the difference between September’s overall and core readings to satirize a measure that excludes food and energy prices.
The Bureau of Labor Statistics reported that the Consumer Price Index rose 3.7% from a year earlier in September. The index excluding food and energy increased 2.6% over the same period. The next CPI report is scheduled for Nov. 10 at 8:30 a.m. ET.
The post’s challenge sets two dates: readers who focus on core inflation should avoid goods counted in the overall index until the Nov. 10 release, it says, and should wait until Nov. 13 to consume food, beverages, travel, heat and electricity. The writer also points to gasoline and other energy-related expenses. The exercise is presented as satire aimed at commentators who set aside the headline figure.
Ritholtz.com notes that some goods remain in the core measure, including cars, clothing, computers, medicines and household appliances. The post uses that contrast to argue that excluding food and energy can make the core reading feel removed from the expenses it leaves out.
The post also connects its criticism to earlier changes in inflation measurement. It lists postwar revisions to consumer baskets, the emergence of core inflation, owners’ equivalent rent, the Boskin Commission, chained CPI and Federal Reserve shifts toward personal consumption expenditures measures. The author characterizes these developments as efforts designed to understate inflation and says the list contains no comparable actions that overstate it. Those judgments are the post’s argument, rather than findings attributed to the Bureau of Labor Statistics.
The Nov. 10 CPI release is the next scheduled data point cited in the post.
