It’s Getting Harder to Measure Inflation

Bloomberg: “The pandemic has created major headaches for the people whose job it is to determine the rate of inflation right now, and set the benchmarks that will be used to measure it in the future. They face two fundamental problems.”

“First, gauges like the Consumer Price Index are based on a ‘basket’ of stuff that Americans typically spent their money on in the past–which looks quite different from what people have been buying in the pandemic year.”

“Second, the standard way of compiling inflation numbers is to visit stores and check their asking prices. Researchers haven’t been able to do that during lockdown, leaving holes in the data.”