An Example of how BLS Manipulates Inflation Statistics
According to BLS inflation statistics, the price of new/used cars is virtually unchanged since 1982. How is this possible, when the real price has multiplied? Through the miracle of hedonic adjustment, where the quality/features of a product affect the manipulated “price”. For example, if a 2013 Ford sedan has airbags and air conditioning standard, and the ’82 version didn’t, the price of the ’13 model is adjusted downward.
The manipulation of inflation data began in the 1980’s, accelerated in the 1990’s, and continues today with new initiatives such as a chained-CPI calculation of payments for social security. For more on this topic, see ShadowStats.com, which calculates current inflation as it was measured in 1980 and 1990.
All these changes result in a artificially lower view of inflation. And regardless of whether you agree with these changes or not, you should at least acknowledge that they make all comparisons to previous inflation data near meaningless.