Alternate Inflation Measure Including Interest Costs Shows Much Higher Rate, Aligning More Closely with Dropping Consumer Sentiment

The official inflation rate excludes interest costs, diverging from what consumers actually experience. An alternate calculation including interest costs shows inflation peaking at 18% in November 2022.

Consumer sentiment tracks more closely with the pre-1983 inflation measure than the current one. This suggests consumers factor in interest costs absent from official statistics.

Inflation is cumulative, so a slowing inflation rate doesn't negate prior price increases. Prices are still rising, just at a decelerating pace.

Excluding interest costs from inflation statistics could become more problematic over time as federal debt and associated borrowing costs rise.

We need healthier debate on how to best measure inflation. Independent attempts at calculation should be encouraged, not criticized.