That's what the Fed says when confronted with the facts, which showed the CPI over 4% last month and that number is a drastically low estimate of inflation since it says things like "Netflix was $13 last month and this month it's $15 but, since they added 10% more shows (in Turkish), we're only going to count that at an 0.70 price increase."
These are called Quality Adjustments and that's why, if your computer costs 10% more than your last model but it has 10% more memory and 10% more processing power – it's considered to be the same price – even if you have no desire for the extra memory or power. Think about your IPhone, the original ones has 256 Megabytes of memory – now they have 256 Gigabytes of memory – that's 1,000 times more so your phone is 1,000 times less expensive than you think it is – less than $2 in 2007 prices. The fact that you actually pay $1,200 for it is simply a mathematical inconvenience ignored by the Government.
According to the BLS, the price of computers is only 39% of what it was in 2007. Are consumers really paying 60% less for computers today than they did in 2007? Of course not. Track any computer that has remined in production for the last 12 years, and you’ll see that none of them have gone down in price. The only reason why BLS argues that computer prices have declined 61% since 2007 is because today, you can get a $400 computer as fast as the $1000 computer in 2007.
According to CPI, inflation in new cars and trucks is 47% since 1982. At the same time, according to the industry analysts at Kelly Blue Book, the average transaction price for a new light vehicle is $37,185 in May 2019. Yet in early 1980s, the price of a Porsche 911 Super Carrera was only $20,775. The price of a mid-trim Honda Accord was only $8,549. $37,185/1.47 = $25,295. If I had $25,295 in 1982, I could purchase almost any car on the market outside of top tier flagships and supercars. How is it, that the average price of…