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“You can easily see why CPI was a poor measure of inflation during the pandemic recession." Spending on groceries increased 29% in March last pushing prices up 2.7% month-on-month. By contrast, transport spending declined 70% and prices dropped 7%. According to economists, the net effect is that the official calculation of the consumer price index underestimated the price changes the population experienced in their day-to-day lives.
“You can easily see why CPI was a poor measure of inflation during the pandemic recession,” said Miguel Faria e Castro, an economist at the Federal Reserve Bank of St Louis. “This recession entailed an unprecedented shift in the composition of household consumption.” As the US economy reopens and lockdowns end, the effect has reversed. For example, a decline in production of cars and trucks over the past year has pushed up used vehicle prices. Since Americans have spent less on transport since the start of the pandemic than the CPI weighting suggests, April’s official inflation reading — which recorded a big jump — was probably an overestimation.
https://www.ft.com/content/abad2b97-b40a-4e68-8834-6d7c17dcd404
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