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To: FromLori
The Fed does not count food or energy in inflation

That statement is false.

Has the BLS removed food or energy prices in its official measure of inflation?
http://www.bls.gov/cpi/cpiqa.htm#Question_1

No. The BLS publishes thousands of CPI indexes each month, including the headline All Items CPI for All Urban Consumers (CPI-U) and the CPI-U for All Items Less Food and Energy. The latter series, widely referred to as the “core” CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy. However, all consumer goods and services, including food and energy, are represented in the headline CPI.

Most importantly, none of the prominent legislated uses of the CPI excludes food and energy. Social security and federal retirement benefits are updated each year for inflation by the All Items CPI for Urban Wage Earners and Clerical Workers (CPI-W). Individual income tax parameters and Treasury Inflation-Protected Securities (TIPS) returns are based on the All Items CPI-U.

36 posted on 02/12/2011 9:59:29 AM PST by thackney (life is fragile, handle with prayer (biblein90days.org))
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To: thackney

“January’s CPI data is due out next week. Owner’s equivalent rent, what a homeowner would expect to earn from renting his or her home, is a quarter of CPI and 40 percent of core CPI, which excludes food and energy prices.”

http://www.cnbc.com/id/41532903


38 posted on 02/12/2011 10:53:33 AM PST by FromLori (FromLori">)
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