The quality of CPI inflation data has dropped to a rare low point, and market confidence in economic data continues to decline

Golden Finance reports that The Kobeissi Letter posted on X platform stating that the quality of CPI inflation data has fallen to a rare low: in October, up to 40% of the weights in the core CPI components are estimates, with 22 percentage points coming from housing rent and another 18 percentage points from other goods and services. Normally, the U.S. Bureau of Labor Statistics (BLS) calculates the CPI inflation rate monthly based on approximately 90,000 price observations covering 200 categories of goods and services. When specific price data cannot be obtained, the BLS uses estimates to fill in the gaps, which typically account for only about 10% of all statistical items. In this report, 34% of all inflation components are derived by referencing information from other categories or regions. This is the fifth consecutive time that this estimate proportion has exceeded 30%, and the value is more than three times the average level from 2022 to 2024. Market confidence in economic data continues to decline.