Theres

 

how the CPI "weights" changed.

How the CPI “Weights” Changed and Moved CPI: Meet the Surprises

There has been a hullabaloo of sorts in certain circles recently about the adjustment of weights for the calculations of the Consumer Price Index (CPI) by the Bureau of Labor Statistics. Swirling around in this hullabaloo were suggestions that certainly the BLS is adjusting the weights to manipulate CPI down and further deceive Americans about inflation. So we’re going to look at the actual weights and numbers and charts, to see how the weights changed in recent years and for 2023. So meet the surprises.

(The deception? Was this not being done a year ago. There's a lag. Inflation has been running higher than what we were being told all last year if we were to have use these metrics then.)

"There are about 330 detailed goods and services in the consumer basket that makes up CPI. This covers just about everything consumers are buying. Each of these goods or services is assigned a weight in the overall index that determines its “relative importance” in the overall index. All goods and services added together have a weight of 100%. That never changes. What changes are the weights of the individual categories, some weights increasing, others decreasing, but the sum always = 100%.

"The BLS adjusts these weights based on the changing purchasing patterns by consumers. When consumers spend a larger portion of their total spending on item X than they used to, the weight of Item X increases. Conversely, they will spend a smaller portion of their total spending on Item Y, and its weight is then reduced. The idea is to keep the CPI basket up-to-date with current consumer purchasing patterns, which shift over time.'

"These adjustments used to be made on a two-year cycle. Starting with 2023, the adjustments of the weights will be made every year to capture shifts in spending more quickly. During Covid, there were massive shifts in the spending patterns, causing mind-boggling distortions in the economy. But because the weight adjustments occurred on a two-year cycle, they initially missed the big changes. So going forward, the adjustments will be made annually, the BLS said.

(Translation?

CPI inflation was higher all of last year than what we were being told.)