Why Reported Inflation Seems Different Than Reality

Zero Hedge ^ | 20 December 2012 | Tyler Durden

[arthurus]

But the manipulation of the data did not stop there. Aside from the weighting changes the BLS instituted a system of “hedonic” adjustments. Hedonics adjusts the prices of goods for the increased pleasure the consumer derives from them.

“That new washing machine you bought did not cost you 20% more than it would have cost you last year, because you got an offsetting 20% increase in the pleasure you derive from pushing its new electronic control buttons instead of turning that old noisy dial, according to the BLS.

When gasoline rises 10 cents per gallon because of a federally mandated gasoline additive, the increased gasoline cost does not contribute to inflation. Instead, the 10 cents is eliminated from the CPI because of the offsetting hedonic thrills the consumer gets from breathing cleaner air. The same principle applies to federally mandated safety features in automobiles. I have not attempted to quantify the effects of questionable quality adjustments to the CPI, but they are substantial.”

[steve86]

We still fill two carts for a little over $250, at Winco Stores here in the PNW. Of course, the price isn’t based on weight or volume, but basic foods, store brands and avoiding processed and convenience foods helps keep the damage down.

[Graybeard58]

or years i've bought five candy bars at Wally's for an afternoon work snack for five bucks, last month they sent to $1.26 each.

If it were just candy that increased 26%, I could live with it but my health ins. premiums are sky rocketing and everything else one needs to survive, including all groceries and other absolute necessities, fuel, utilities etc. My water bill alone increased by 15% in 2012.

I'm pretty much on a "fixed income", I know we all are, in reality. My income is fixed at a pretty nice number but won't stay "nice" with rampant inflation year after year and I have the distinct impression that "we ain't seen nothin' yet". Bronco has 4 more years to really "f" up our economy.

It isn't a Mayan calender that will crash civilization, it's a-hole liberals and their moronic policies, both social and economic.

[Chode]

oh i hear ya, believe me, my ins went up too... it was merely a simple example that even kids will see when spending their allowance

[arthurus]

They systematically eliminate the things that rise in price sayint that they are “seasonal” or it is an unusual phenomenon or such. but when something like oil rises rapidly, if there is not inflation then other things must fall because there is not the money to pay the ole prices for the other things when oil is taking up more of the money. That doesn’t happen. of course, because inflation is actually pretty high and getting steadily higher. The official assumption is born of the official static analysis which posits that people do not alter their buying habits or their tax paying/avoiding habits because of decreasing assets. It is absurd on the face of it but it is Official Economics.