Friday, December 29, 2017

It's not subtle at all, really, and anyway I caught you

The Fed's Inconsistent Numbers at the Peterson Institute.

From the footnote:

CPI inflation has generally been slightly higher than PCE inflation.

No, that's not right.

CPI was the official measure until the year 2000. Since the year 2000, PCE has been the official measure. The way one describes the difference between them must not contradict the change that occurred in the year 2000. If the CPI is generally higher than the PCE, and the official measure changed from the CPI to the PCE, then the correct way to describe the relation is to say

PCE inflation has generally been slightly lower than CPI inflation.

Otherwise, you are embedding a subtle lie into your story.

Got that, Peterson?

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