A math problem at the Labor Department?
Courtesy of Tim Iacono at The Mess That Greenspan Made
This morning’s inflation report is generating all sorts of headlines about core consumer prices falling for the first time since 1982. In looking at the screen shot of the detailed data from the Labor Department below, there is clearly some sort of a math problem associated with changes that were recently made to category weightings (note that only the relevant data is included below from a much larger table).
Looking at the weighting (Relative importance) and the indentation on the left to determine which categories are sub-categories of others it becomes clear that you can’t get the large negative number of -0.5 percent circled in red from the data circled in blue.
It appears that they are mistakenly weighting the -2.1 percent decline for lodging away from home at a much higher level and, since housing is a major component of core inflation, the first negative reading in 28 years was the result.
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Apparently, Tim’s attracting visitors from the BLS. Here’s what he’s found.
A sudden interest in TMTGM by the BLS
Well, someone at the Bureau of Labor Statistics has been poking around here this afternoon and they spent a fair amount of time here. Hey! That’s my taxpayer money, isn’t it?
I’ve not heard from anybody on this subject yet but I did go through some calculations with some of the other categories in the most recent inflation data as a sanity check and, as far as I can tell, they’ve got an error in today’s report as noted here earlier today.
It still seems to me that, despite what you may have read in the mainstream media and elsewhere today, monthly core inflation did not decline for the first time since 1982.
