\n<\/p>\n
Donald Trump has a lot of questions about the official government statistics these days. And while his skepticism of bad numbers may look cynical and political, there are reasons to look at the numbers cautiously.<\/p>\n
According to some reports, staffing shortages \u201chave forced the US federal government to scale back the price checks it uses to calculate the inflation rate\u201d with the labor department reportedly admitting that it had to \u201ccut back\u201d on its price checking nationwide and even suspend its surveys in some cities due to manpower shortages.<\/p>\n
Manpower shortage or not, is the agency\u2019s methodology even reliable?<\/p>\n
A recent study published by the Petersen Institute of International Economics looked at the Consumer Price Index (CPI) \u2013 the most widely watched measure of the costs of goods and services.<\/p>\n
The CPI uses \u201cweights\u201d of different goods and services purchased that are out of date, according to the Petersen Institute, could be skewed by products that may not be well-represented (i.e. bought by more consumers than others) and may not adequately adjust for changes in product characteristics like quantities to reflect strategies like \u201cshrinkflation\u201d.<\/p>\n
Cynics might want to claim the stats are influenced by political bias but the authors of the Petersen study concluded that the basic methodology for calculating inflation is \u201crobust and defensible\u201d. But still, they say, improvements \u2013 such as using alternative data sources, updating expenditure weights more frequently and constructing price indexes by income group, region, or other subpopulations \u2013 are needed<\/p>\n
So where else can we look for evidence? Here\u2019s five alternatives that give a rounder picture of the true rate of inflation.<\/p>\n
Truflation Price Index<\/strong><\/p>\n This research firm combines inflation data from 30 data partners that track prices in housing, transportation, food, durables and other areas.<\/p>\n Institute for Supply Management (ISM) Price Index<\/strong><\/p>\n The ISM is known for measuring economic activity based on actual date reported by both its manufacturing and service industry members each month. For me, this is a great leading indicator as the prices being paid by ISM members are ultimately going to find their way down to our pockets when their products and services are ultimately consumed.<\/p>\n Adobe Digital Price Index<\/strong><\/p>\n Online digital tools provider Adobe publishes this index to track thousands of actual prices for everything bought online, including electronics, office supplies, groceries and toys.<\/p>\n National Federation of Independent Businesses (NFIB) Pricing<\/strong><\/p>\n For more than 50 years, the NFIB has been taking financial and narrative information submitted by its members to determine overall small business optimism (which has been trending higher over the past few months). Like the ISM price index, this is another leading indicator I watch because part of this data gathering includes prices. This past month, the organization reported that the net percent of owners raising average selling prices fell three points from July to a net 21% (seasonally adjusted), the lowest reading of this year.<\/p>\n Bloomberg Commodity Index<\/strong><\/p>\n This daily index tracks futures contracts for 24 commodities across six sectors (energy, grains, softs, industrial metals, precious metals, and livestock) which include gold, Brent crude oil, natural gas, aluminum, copper, corn, soybeans, cotton, cocoa and live cattle.<\/p>\n Zillow Rent Index<\/strong><\/p>\n This index \u2013 which launched in 2020 \u2013 tracks the typical market rent for a given geographic area (national, state, metro, city or neighborhood) based on rental listings and data from public sources. It\u2019s designed to track changes in asking rents over time, not just a sample of lease renewals. According to the company, their statistical models adjust for differences in property characteristics in an effort to capture the \u201ctrue market rent trends\u201d rather than just shifts in the mix of listed units.<\/p>\n So what\u2019s the takeaway?<\/p>\n According to the BLS annualized inflation is currently running at 2.9%. Truflation\u2019s inflation rate is 2% (and down from 3% at the beginning of the year). Zillow\u2019s index is 2.44 %. Bloomberg\u2019s commodity index is up 3.6% since the beginning of the year. Adobe\u2019s online price index has decreased 3% year over year. Even taking commodities into consideration, it seems like consumer prices are lower than what the BLS is reporting.<\/p>\n But clouds are gathering. That\u2019s because the ISM says that both manufacturing and service prices have risen more than 15% since the beginning of the year, despite a decline from last month, the NFIB\u2019s members are saying that their price increases remain above the average of a net 13%, suggesting continued inflationary pressure.<\/p>\n Are these numbers gospel? Of course not. But, taken together, I think they give a more impartial, data-driven view of inflation than what we\u2019re seeing from the federal government. This tells me that inflation is going to rise in the coming months, mostly thanks to tariffs.<\/p>\n","protected":false},"excerpt":{"rendered":" Donald Trump has a lot of questions about the official government statistics these days. And while his skepticism of bad numbers may look cynical and political, there are reasons to look at the numbers cautiously. According to some reports, staffing shortages \u201chave forced the US federal government to scale back the price checks it uses<\/p>\n","protected":false},"author":1,"featured_media":24831,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[5347,1111,1406,2973,1407,5076,6747,1081,71,13142],"class_list":{"0":"post-24830","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-alternative","9":"tag-data","10":"tag-gene","11":"tag-inflation","12":"tag-marks","13":"tag-numbers","14":"tag-skepticism","15":"tag-suggest","16":"tag-trumps","17":"tag-uneven"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/24830","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24830"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/24830\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/24831"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}