Consumer prices rose 0.8% in November, pushing the increase in the last 12-months to nearly 7%. That represents the most significant increase since 1982. But in reality, the current inflation rate is much higher than what is reported and above that of 1982.
The shelter component of the CPI, which has the most significant weight, increased 3.8% in the past year. That compares to a 7% to 9% increase at the highest point in 1982. But that is not an apples-to-apples comparison.
In 1982, the CPI shelter component included house prices for owners’ housing costs. But nowadays, the shelter component for owner’s housing is based on a non-market rent index. House prices are up close t0 20% in the past year versus a 3.5% increase in owners’ rent...
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