What Inflation? Here Are The Various Components Of The CPI Basket

Tyler Durden's picture

Earlier today we pointed out a curious divergence: while owner equivalent rent, the measurement of imputed costs of renting, has risen to the highest since the Lehman failure, total non-shelter core CPI continues to decline. What is notable is that OER amounts to 23.9% of the CPI basket - as such it is the single largest determinant of inflation as measured by the BLS. And yet everything else, hedonically adjusted of course, keeps falling. By how much? And do you agree with the BLS' estimates of inflation? To answer these not so important questions, here is the full CPI basket, broken down by weighings, and by annual change.

At first blush, a lot of the "inflationary" assumptions shown below make little if any sense, but then again who are we to argue with the Arima-X-1 seasonal adjustment juggernaut of a few good Econ PhDs.

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VD's picture

pure BS! inflation well over 3%..for while now...and that's not factoring ponzi rigged equities which are more than double their fundamentals...

TruthInSunshine's picture

BLS = Bullshit & Laughable Satire

SafelyGraze's picture

I stopped paying rent when I moved into maw-maw's basement

that kind of hedonic adjustment proves that deflation is in full swing


Pool Shark's picture



Inflation doesn't count;... if you don't count inflation...



economics9698's picture

Lasagna up 20%, I am pissed.

Crisismode's picture



Check out John Williams Shadowstats to find out . . .

The Real Lies behind the CPI

Total Bullshit fed to us daily.


zaphod's picture

Education up 1.5%

What fucking world do these asshats live in?

NoDebt's picture

I saw that too.  It's lumped with "communication" and hedonically adjusted.  In short, magic.

FEDbuster's picture

When the number gets too big, they change the equation.  Pure lies, but what do you expect?

mliu_01's picture

Bullcrap just got a lot more aboundant and much cheaper. It drags the average price of food way down.  Eat less steak and eat more bullshit. Then you will see the wrath of deflation.

Bananamerican's picture

Future Bananamerican..."Honey, today, I manage to purchase 2 kilos of gmo tomatoes at Traitor Joes for 575 dollarz"

old naughty's picture

looks to me a basket case of realINdex...

CognacAndMencken's picture



Has anyone figured out why oil went to $150 in 2008?  The entire world economy was 6 months into the worst recession since the Great Depression, inventories were increasing and yet oil shot to the moon for no apparent reason.  It certainly couldn't have been inflationary forces or money printing that shot it to $150.  After trillions in new money supply, it's just now crossing $100.  What was the story with oil in 2008? 

Was it really the guys at GSCI? 

Of all the conspiracy theories, the oil "super spike" of 2008 is - BY FAR - the most suspicious to me.  And what's even more suspicious is that no one talks about it or seems to care.  I mean, c'mon (!!!).. oil suddenly untethered itself from ALL FUNDAMENTALS and shot to the moon, which, in turn, tilted the entire world into a massive economic collapse.... and no one is talking about it?? 


F22's picture

One of the best associations I've seen postulated has to do with Saudi Arabia and the gold for oil trade.  As the gold supply has tightened, it has become more difficult to keep the flow of gold for oil to Saudi Arabia going.  They will not accept potentially worthless fiat for their oil.  If they cannot get paid in gold, the price in dollars will skyrocket.  Perhaps the spike to $150 had everything to do with dwindling gold supplies and little or nothing to do with oil supplies.  Check out http://www.FOFOA.BLOGSPOT.COM.  The latest post is lengthy but touches on this association.

CognacAndMencken's picture



To be honest, that's one of the dumbest explanations for the 2008 "super spike" I've ever read.



F22's picture

Admittedly, my explanation was brief.  Understanding the context of freegold requires a commitment to reading the thoughts of Another.  If, as your post suggests, you are truly curious about the dollar price of oil and the factors affecting it the brilliant research and logic of fofoa may eventually help you to understand.  Those familiar with FOFOA and the freegold blog will attest to the value of learning the history of gold and the dollar's reserve status.

RockyRacoon's picture

You simply ask too much.  The information from FOFOA takes a bit of time, and, as you say, looking back to the work of Another, to fully comprehend.   It's not blather offered on a silver platter of sound-bites and simple graphs on CNN.  This makes any regular guy off the street (I ain't naming any names here) oblivious to complex truths.  Wouldn't it be nice if the world ran on simple one-on-one cause and effect?  Since it's not, the typical person will look to the simplest of explanations and then go rest all comfy and relax on the sofa, fire up the tube, and rip open a bag o' chips.  Don't ask so much of simple souls.

Squid-puppets a-go-go's picture

then allow me to attempt to summarise:

FOFOA claims that the oligarchy - both old european (Rothchild types) and the new oil barons of Saudi Arabia know the true value of gold to be perhaps 20x the comex price. They dont want to spoil the fiat party until necessary, so they tolerate this divergence in value for now

Because of this, the saudi's have been accepting gold for oil at a much greater equivalent value than the comex price. The blog puts their position like so -Arabia says, "I will sell oil for $10US a barrel or in gold valued at $10,000"

now, when a crisis like 2008 happens and everyone clings onto their gold in self preservation mode, it pisses off the Saudis. They dont want to trade their consumable wealth - oil - for other transitory and ephermeral sources of wealth like $US toilet paper - they want to be paid in a medium that will maintain its wealth as a legacy for generations to come. So when the US/West stops handing over gold for oil, the Saudi's jack up the price of oil to compensate themselves for not receiving the shiny yellow stuff.

its not only germany that received scrap metal gold - anecdotes from dubai also say the gold they are getting from the US is old coins and collectables from the back of the vaults that they have to smelt back into bars. 

lucyvp's picture

This sounds like another similar theory posutlated by Eric Janszen at itulip.com.  He has a theory called GAGFO, which is an acronym for good as gold for oil.  When the U.S. is doing well economically, countries are willing to hold $$$ as foreign reserves in general to be able to purchase oil on the open market.   When the U.S. is in economic or political turmoil central banks move their allocation to less dollars and more gold.  This explains CB's being net buyers of gold since the financial crisis of 08.  Lack of confidence in the usd.  Janszen attributes the decline in gold to the u.s. importing less oil since the fracking boom, and closing the budget deficit since 08.  However he views both to these as short term trends and gold prices will continue their upward trend in a few more years.


I would be curious where is a good place to find out about FOFOA

Deathrips's picture

* copied from www.silverdoctors.com deepcaster story.

Bogus Official Numbers vs. Real Numbers (per Shadowstats.com)

Annual U.S. Consumer Price Inflation reported February 20, 2014
1.5%     /    9.17%

U.S. Unemployment reported February 7, 2014
6.6%     /     23.2%

U.S. GDP Annual Growth/Decline reported January 30, 2013
2.74%        /     -1.40%

U.S. M3 reported February 15, 2014 (Month of January, Y.O.Y.)
No Official Report     /     3.07% (i.e., total M3 Now at $15.544 Trillion!)


“Only new-home sales data showed positive monthly results. Yet, with that series at 65% below its pre-recession highs, and with headline monthly and annual gains well shy of approaching statistical significance.”


“Durable Goods Orders in Downturn,” Commentary Number 603

www.shadowstats.com, John Williams, 02/27/2014


Note 2: We encourage those who doubt the scope and Power of Overt and Covert Interventions by a Fed-led Cartel of Key Central Bankers and Favored Financial Institutions to read Deepcaster‘s December, 2009, Special Alert containing a summary overview of Intervention entitled, “Forecasts and December, 2009 Special Alert: Profiting From The Cartel‘s Dark Interventions – III,” and Deepcaster’s July, 2010 Letter entitled, “Profit from a Weakening Cartel; Buy Reco; Forecasts: Gold, Silver, Equities, Crude Oil, U.S. Dollar & U.S. T-Notes & T-Bonds,” in the ‘Alerts Cache’ and ‘Latest Letter’ Cache at www.deepcaster.com. Also consider the substantial evidence collected by the Gold AntiTrust Action Committee at www.gata.org, including testimony before the CFTC, for information on precious metals price manipulation. Virtually all of the evidence for Intervention has been gleaned from publicly available records. Deepcaster‘s profitable recommendations displayed at www.deepcaster.com have been facilitated by attention to these “Interventionals.” Attention to The Interventionals facilitated Deepcaster‘s recommending five short positions prior to the Fall, 2008 Market Crash all of which were subsequently liquidated profitably.

DonFromWyoming's picture

Yep.  Cattle at highest prices ever.  WTI crude $105.  NAR reports 9.9% increase in housing prices (YOY) for December 2013.  Gummint BS - through the roof!

VegasBob's picture

Of course BLS inflation figures are bullshit.  BLS disguises inflation with "hedonic" adjustments, which represent "quality improvements."


Toilet paper is probably a good example.  Back in the late 90s/early 2000s, you used to get 280 sheets of 2 ply paper per roll, and a store brand roll cost about 25 cents.


Now you get a "double" roll that has only 240 sheets of double ply paper puffed up with air and it costs about a dollar.


Even though the true rate of toilet paper inflation is over 500% (13 sheets for a penny then vs 2.5 sheets for a penny today), the BLS will hedonically adjust that down to perhaps only 50% because it considers the "puffed up" paper a "quality improvement."


Here's your assignment for tomorrow morning:


Try to wipe your ass with a quality improvement!

socalbeach's picture

minor corrections, using your numbers: price has gone up by a factor of 4.67 (1/0.25 * 28/24) which is 367% inflation.  (A doubling of the price level is 100% inflation).

NoWayJose's picture

Charmin screwed with the width of a roll late last year, going from 4.27 inches wide down to 3.92 inches wide. As it became difficult to find any remaining 4.27 inch Charmin I started checking out older non-chain grocery stores -- the kind you never buy toilet paper at -- where I found... a bunch of 4.5 inch wide rolls! This shrinking game has been played a long time...

snr-moment's picture

What?? You dudes can still afford tape measures and scales???    Reeducation camps for you, suckas.


Wile-E-Coyote's picture

What BS; only 10% weighting on food, where the feck is energy. The bastards can't keep lying forever.

Saucy-Jack's picture


blindfaith's picture

Wait, WAIT.....this just in...

AS folks work longer hours for less pay, they will have less time to buy anything so the rate of inflation will naturally go down!

On a long enough time frame, inflation will go to ZERO!

Muppet Pimp's picture

Lots of multifamily construction going on in Florida in the last few years.  Suspect that will keep a lid on rents. Lot of those properties picked up on the cheap in the recession.

There should be a narrow column added for our pet expenses. The cost of owning a good hound has not gotten any cheaper the last few years. DayHoundcare & Kenneling prices are through the roof.  It is getting increasingly difficult to get your hound enrolled in the best kennels.

Kreditanstalt's picture

GOLD. What about that highly inflated "gold bubble"?  I have to have buy that monthly you know...

Sleepless Knight's picture

Just throw in gas at $3.70 a gallon and see where that gets ya.

deus x machina's picture

the fresh bread at kroger went up 30%  that's a lot of dough!

NoDebt's picture

Yeah, but they sliced the loaf into 40% more pieces, so it's actually a 10% decrease in price.  See how that works?

Next up: pizza.  

Urban Redneck's picture

I guess the BLS got an exemption from Obamacare.

Or no one has actually bought any yet

kareninca's picture

From my last trip to Trader Joe's to the most recent, the bread that I have bought for years (organic soy crunch) has gone from $2.99 to $3.29.  A ten percent increase.  I remember clearly when it was $1.79.

Fuck you, Bernanke.  If an upper-middle-class American notices, I can only imagine how the poor in the third world whom you are starving, feel about it.

Well, the Fed no doubt likes little wars, like in the Ukraine.  Drives down the U.S. stock market (which the Fed presently sees as a bit high), without the Fed being blamed.  Drives down the 10 year Treasury rate; win-win U.S. housing, the Fed's favorite.  Disgusting.

RockyRacoon's picture

The lowly banana at Sam's has gone from 99c for 5 lbs to $1.49 for 5 lbs.

I'll leave you to do the math.

BeetleBailey's picture

Again I say...FUCK whatever the government states.


A pack of shit sucking liars..........

yogibear's picture

Wait until the goverment discovers section 8's are being priced out. Next, socialistic rent controls.

The game goes on until people have no place to live or eat. 


OldPhart's picture

Anybody else think of section eight in military terms?

NOTaREALmerican's picture

Well, like everything else...  

The inflation numbers for the top 20% economy is entirely different for the losers at the bottom (but, nobody cares about them anyway).

IPA's picture

I recently switched to lawn mower, wayyyy cheaper than great clips 

Ewtman's picture

The argument for global deflation is a strong one. While local prices in some areas may be rising, it is arguable that CPI, PPI, housing and other indicators reflect short term movements, i.e. bear market rallies, in an otherwise collapsing economic environment. Today's market collapse could be just the beginning of a long term deflationary decline brought on by the popping of a bubble decades in the making. 



Cacete de Ouro's picture

Fonestar is confused about housing being > 40%. Fonestar has free basement and free wifi