In the meantime, food has doubled, but it doesn’t get counted, and as Organic Panic has pointed out, the government counts “packages” for so many items, and the manufacturers make the packages smaller but keep the price the same. IIRC, I had to get a bag of sugar recently, and the old 5 pounder is now a 4 pounder....but, I’m just a tin foil whiner, that’s not a price increase. /sarc
When the news or the Fed cites the CPI, they are citing core inflation.
Core inflation has had the cost of food and energy removed in order to smooth out the CPI or remove volatility. This removal of volatility assumes the prices goes up and down not up and up and up.
Of course this means core inflation does not represent inflation as it is experienced by the general population.
In addition core inflation is used to evaluate how well the fed is doing in one of its mandates - stable prices. Isn't that convenient ?
The CPI has been changed from reflecting the cost of a set standard of living to reflecting the cost of a declining one. The tools used to achieve this include weighting and the chained CPI.
So if you aren't worried about the price of the essentials of energy and food, and about maintaining a set standard of living the CPI says every thing is hunky dory.
OTH if you want to see what the CPI would be if measured as it was before 'enhancements' seriously affected it, look at the blue line on the chart below.
