Trust these numbers? Economists see a lot of flaws in delayed CPI report showing downward inflation
Thursday saw the release of a much lighter-than-expected inflation report for November, and economists are already questioning its significance.
TL;DR
- November's consumer price index (CPI) showed an annual inflation rate of 2.7%, with core CPI at 2.6%, both lower than anticipated.
- Economists expressed skepticism due to potential methodological issues, including the BLS assuming 0% inflation in some categories.
- Owners' equivalent rent (OER), a key component of housing inflation, appears to have been particularly affected by these issues, potentially leading to a downward bias.
- Holiday discounting in certain goods categories might have also contributed to lower prices during the data collection period.
- While the market initially reacted positively, the enthusiasm waned as concerns about the data's accuracy grew.