The “Putin Price Hike” Is Fake News

By now you’ve heard that the annual rate of inflation hit a 41-year high of 8.5% in March. Prices for food, energy and used vehicles increased the most, with preowned cars and trucks jumped 35%, gasoline 48%.

But here’s something you may not know: The Bureau of Labor Statistics (BLS), which issues the monthly consumer price index (CPI), has changed its methodology for measuring inflation more than twice over the past few decades. Today’s CPI doesn’t actually tell us how much prices have changed; instead, it allegedly tells us changes in the cost of living.

This is why, in 2020, I called the CPI “fake news.” In reality, inflation as you and I understand it is running much higher than reported.

If we use the BLS’s methodology from 1980, prices actually increased 16.8% last month, which is almost double the official CPI print. The data below is courtesy of economist John Williams’ Shadow Government Statistics. official consumer price index (CPI) vs. Alernate Inflation Data

The Biden Administration blames the “Putin price hike” for elevated prices, particularly energy prices. This is simply more fake news.

Don’t get me wrong. The war in Ukraine has contributed to inflation in the short term. But there’s much more to the story, which began way before Russia invaded its neighbor.