Luc, did you see The Rap's latest propaganda ploy...?
"After Friday's employment data, which showed declines in manufacturing, retail and construction that just don't jibe with reality, I did a little reality check with some of the CPI data. This is what I found:
1) The housing component of CPI for the nation is running at around 2.2 percent y-o-y rate, which does sound a little low given all the noise about real estate booming across the country.
2) To test this, I checked the housing component of CPI for just the New York, New Jersey and Connecticut area. I was astonished. The housing component of CPI in the New York area is running at 2.04 percent, July '98-July '99, LOWER THAN THE NATIONAL AVERAGE! In fact, from January 1995 to July 1999, New York housing costs have risen at a lower rate than the national average! This just doesn't ring true. Does it?"
As long as we're talking about fiddled CPI statistics, Freddie Mac came out today and said that its home price index was up 5.5 percent in Q2, not exactly jibing with what the BLS had to say. And while we're on that particular subject, the BLS has been telling us that annual inflation has averaged barely 2 1/2 percent since 1990. However, median home prices have soared 45.1 percent over that period, which works out to be about 4.4 percent annually.
Therefore, if the BLS hadn't removed the actual housing prices from the CPI in 1983 and replaced it with a hypothetical rental equivalent, then the official inflation rate would be running at least 1 percent higher. I'm indebted to Jim Stack for that piece of trivia. It's a concrete example of how these government statistics are really pretty meaningless. |
