[1rudeboy]

The CPI is such a sham. They count things like home purchase costs, new cars and electronics. Things people buy very infrequently, but leave out food and energy.

Let's take a look at the first two paragraphs of the latest BLS news release (next one announcing inflation comes on Wednesday):

Consumer Price Index - September 2010 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.1 percent before seasonal adjustment.

Increases in food indexes and another rise in the gasoline index contributed to the all items seasonally adjusted increase this month. Four of the six major grocery store food group indexes increased in September as the food index posted its largest increase since October 2008. The gasoline index rose again in September, leading to a third consecutive increase in the energy index despite a decline in the index for household energy. [emphasis added]

www.bls.gov.

[expat_panama]

The other mistake there was saying the CPI included home purchases.  While about 41% is housing, the BLS says that 'housing' is furniture, bedding, appliances, utilities, and any home prices are buried under something called "owner's equivalent rent".