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Comment by specialp | Hacker News Reader

Inflation is low measured by the CPI and that is because most of the things measured in that index are made by people that are NOT increasing their wealth. It is a large transfer of wealth to the more wealthy who then benefit by lower tax rates for these capital gains.

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Some comments below keep saying that CPI measures things like food and energy prices.

What we really mean is that Fed policy is dictated by the Core PCE rate, which specifically excludes food and energy prices. So sure, the CPI measures energy and food prices and other volatiles prices, but *FED POLICY is dictated by the CORE rates*, which specifically exclude those volatile components.

So de facto, no one (ie. the Fed) doesn't care about energy or food price inflation.

CPI constituents:

food and beverages: 15.157%

housing: 42.385%

apparel: 2.663%

transportation: 15.738%

medical care: 8.87%

recreation: 5.797%

education & communication: 6.81%

other goods and services: 3.159%

                                                                          Un-
                                                                       adjusted
                                                                        12-mos.
                              Sep.  Oct.  Nov.  Dec.  Jan.  Feb.  Mar.   ended
                              2020  2020  2020  2020  2021  2021  2021   Mar.
                                                                         2021

 All items..................    .2    .1    .2    .2    .3    .4    .6      2.6
  Food......................    .1    .2    .0    .3    .1    .2    .1      3.5
   Food at home.............   -.3    .1   -.2    .3   -.1    .3    .1      3.3
   Food away from home (1)..    .6    .3    .1    .4    .3    .1    .1      3.7
  Energy....................   1.4    .6    .7   2.6   3.5   3.9   5.0     13.2
   Energy commodities.......   1.4    .7    .5   5.1   7.3   6.6   8.9     22.0
    Gasoline (all types)....   1.7    .7    .5   5.2   7.4   6.4   9.1     22.5
    Fuel oil (1)............  -3.0    .7   3.3  10.2   5.4   9.9   3.2     20.2
   Energy services..........   1.3    .5    .9    .2   -.3    .9    .6      4.1
    Electricity.............    .8    .6    .3    .4   -.2    .7    .0      2.5
    Utility (piped) gas
       service..............   3.1    .4   3.0   -.4   -.4   1.6   2.5      9.8
  All items less food and
     energy.................    .2    .1    .2    .0    .0    .1    .3      1.6
   Commodities less food and
      energy commodities....    .5    .0    .0    .1    .1   -.2    .1      1.7
    New vehicles............    .3    .3    .0    .4   -.5    .0    .0      1.5
    Used cars and trucks....   5.3    .9  -1.4   -.9   -.9   -.9    .5      9.4
    Apparel.................   -.4   -.9    .7    .9   2.2   -.7   -.3     -2.5
    Medical care
       commodities (1)......   -.6   -.7   -.4   -.2   -.1   -.7    .1     -2.4
   Services less energy
      services..............    .1    .1    .2    .0    .0    .2    .4      1.6
    Shelter.................    .1    .1    .1    .1    .1    .2    .3      1.7
    Transportation services    -.3    .2   1.3   -.6   -.3   -.1   1.8     -1.6
    Medical care services...    .0   -.3   -.1   -.1    .5    .5    .1      2.7

https://www.bls.gov/news.release/cpi.nr0.htm

https://www.advisorperspectives.com/dshort/updates/2021/04/1...

The housing component is rent, not home prices. Something that people should note.

The index doesn't include housing, food, and energy either as those are considered 'too volatile'. It's no longer targeting what anybody actually consumes anymore

I don't know where you heard this, but it is not true. The CPI tracks rent/housing, food, energy, tuition, medical expenses, and everything else that people seem to think are excluded.

https://www.bls.gov/cpi/questions-and-answers.htm#Question_1...

BLS tracks many inflation values, including those for housing, food, and energy, and they have done so for over 100 years.

You're confusing core CPI, which excludes them so analysts can see the difference, and the CPI values as reported generally in the media, which do include housing, food, and energy.

The most reported CPI is CPI-U (and is called CPI in the press), which is the CPI for urban consumers, which includes housing, food, and energy, and most comparable to historical and inflation values from other countries.

But BLS tracks many forms. If you want to learn about this read https://www.bls.gov/cpi/

Some comments below keep saying that CPI measures things like food and energy prices.

What we really mean is that Fed policy is dictated by the Core PCE rate, which specifically excludes food and energy prices. So sure, the PCE and CPI measures energy and food prices and other volatiles prices, but *FED POLICY is dictated by the CORE rates*, which specifically exclude those volatile components.

So de facto, no one (ie. the Fed) doesn't care about energy or food price inflation.

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