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Maybe the CPI is pretty close
Old 12-26-2010, 07:48 AM   #1
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Maybe the CPI is pretty close

We have a lot of threads hereabouts complaining about the inaccuracy of the CPI for measuring inflation. An article in today's Washington Post indicates the CPI may not be far off the mark. Two new internet based indices track it pretty closely. The article says,

But the CPI and its Stone Age method of calculation boasts one huge benefit: It's a stable, tested measure, consistent over time, because its methodology doesn't change much. Moreover, and somewhat remarkably, the Google and Billion Prices Project indices actually seem to confirm the accuracy of the old-fashioned CPI, tracking it closely rather than showing it to be off-base.

This doesn't answer whether the Feds should adopt new approaches to CPI calculation and certainly doesn't mean that your "personal inflation rate" may not vary significantly. But it does lend some credence to the use of CPI in Firecalc and other tools we use all the time.
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