This makes more sense to me than the other reports I've been reading. According to CNN, the "misery index" is way, way up and government figures aren't telling the WHOLE truth.
No inflation if you don't eat or drive
According to the government's most recent Consumer Price Index, a key inflation reading, consumer prices rose 3.9% in the 12 months ending in April, down slightly from the 4% annual inflation rate in March despite record gasoline prices.
But Phillips argues that consumer prices are probably up at least 5% and perhaps more than 10%.
Part of the disconnect may be due to the fact that nondurable goods, such as food and gasoline, makes up only 12% of CPI.
In addition, food and energy prices are eliminated from the so-called core CPI, which many economists tend to focus more closely on because they claim food and gas prices are volatile.
But food and energy costs are a very important part of household budgets. And those prices have been skyrocketing: Gas prices were up about 21% over the 12 months ending in April.
However, due to seasonal adjustments in the CPI, the government reported that gas prices were down 2% in April, even though on a non-adjusted basis, gas prices rose 5.6% from March.
And even that number may be too low. Measures of gasoline prices by AAA and the Department of Energy suggested prices rose as much as 10% in April.
