"Stated simply, the true picture in the US is an inflationary environment where Americans pay more and don't have jobs, but bad accounting makes these costs disappear."
SEATTLE --In a troubling sign that accounting problems have grown beyond corporate balance sheets, two of the main economic gauges used by Wall Street, banks, and in the calculation of Social Security payments have been found to contain serious math problems.
The problems were identified in the Consumer Price Index (CPI) and Producer Price Index (PPI) by examining contents of tables provided by the US Bureau of Labor Statistics, and comparing weightings for the most recent years.
According to the tables, in the energy category, at least two changes appeared to reduce energy cost weightings in the indices, including one which reduces importance of "fuels and utilities" in the overall CPI index by a whopping ten percent(1), and another which pushes winter energy cost calculations into summer(2).
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