Bad Government Statistics: Owners Equivalent Rent

In 1983 they stopped counting actually counting housing costs in the consumer price index (CPI) and started using something called owners' equivalent rent.

The argument was that it gave a better picture of inflation, but in reality, it just gave a smaller picture of inflation.

Among other things, it would have had the Fed tightening sooner, because inflation would have been high enough in early 2004-2005.

Go to the link for the chart pr0n. Of particular interest is that core inflation would be negative right now if we used the old metric.