Proof of rampant U.S. deflation

From San Diego Tribune via the Big Picture, irrefutable proof of steady deflation due to enlightened government policy!

Fodder for thought for those curious about U.S. economic statistics.  While conventional wisdom (or publicized rationale) often claims that the recent adjustments to the core methodology remove components that are "more volatile", the evidence here suggests that the new method basically removes 3% from the previously computed rates.  Remarkable how stable this difference is over time.

This is a fantastic chart that makes its point clear and loud.  The secret is in picking the right comparables.  To vet the data analyst with shifting metrics, it is not necessary to prove that the new metric is or is not more accurate than the old.  Oftentimes, by tracking both the old and the new, the effect of the change is revealed.  Here, the adjustments just keep taking the rates down.

Reference: "The Fed's inflation guage isn't realistic, critics say", San Diego Union Tribune, April 17, 2008.

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