PRINTER FRIENDLY VERSION
The CPI Measures Inflation and Other Widely Believed Economic Nonsense
The Fed, mainstream media, and others have a spotlight on the CPI and that’s the wrong spotlight.
In the chart above I plot the Case-Shiller national home price index, the Case-Shiller 10-city index, the CPI, Owners’ Equivalent Rent (OER), and the BLS Rent Index.
I have produced this chart previously, but this month I added the BLS Rent Index.
OER is the mythical price one would pay if one rented their own house from themselves, unfurnished and without utilities.
Prior to the year 2000, housing, rent, OER, and the CPI all moved in sync. In 2000, home prices disconnected from the CPI, OER, and rent.
In 2012 another disconnect developed in which both rentRead More »