The latest government inflation and GDP figures are worthless, and will be for months to come
Story by Michael Hiltzik, LA Times, December 25, 2025
A major problem concerns housing costs, which account for about one-third of the data inputs for the CPI. Because the BLS was unable to collect rental data for October, it implied that the monthly change in rents was 0% in October — further skewing the reported CPI lower. Experts say it will take at least six months to use newly collected data to provide a reliable estimate of housing inflation.
The delay in sampling, Swonk adds, means that some seasonal price phenomena were missed. She points specifically to airfares — the originally scheduled sampling would have incorporated a pre-Thanksgiving run-up in fares, but by the time the data were collected fares had returned to a non-holiday level.
Inflation data also are incorporated into GDP estimates — the lower the inflation rate, Swonk notes, the better the GDP looks. An artificially reduced inflation rate will translate into higher reported GDP growth.
All this might have a limited economic impact — corporations, banks and academic economists generally have sources other than the government to reach their conclusions — if not for the partisan political exploitation of the numbers.
As Karabell reported in his 2014 book, Simon Kuznets, the government statistician who helped to codify the collection of government figures in the 1930s, was concerned about how politics would give the statistics a misleading social significance.
Hiltzik: The latest government inflation and GDP figures are worthless, and will be for months to come
There are techniques for imputing data in the report that the statisticians could've used to estimate the missing values. The agency could've imputed the rents based on industry data by comparing the historical data for their surveys versus the industry data. The delay in the reporting would've given them access to industry data even if their own data collection was suspended. They chose not to for political reasons. |
