W.H.: CPI a Better Measurement of Economic Progress than Actual Cost of Living

‘The CPI is the accurate measure in that it measures the proportion of spending’ on certain goods

NN REPORTER: "One another question. One of the kind of political problems for the administration has been that even though there is all this good economic numbers people don't feel it, partially because average American incomes haven't gone up, but also because big [indecipherable] items despite low inflation elsewhere have been going up really fast, like the cost of college and health care. So what is the better measure of how the average person experiences the economy?"

FURMAN: "I think a lot people wrestled with exactly that question. The CPI is the accurate measure in that it reflects the proportion of spending you have on college; the proportion on health care; the proportion on food, which tends to go down; the proportion on gas --certainly some things which tend to be more [silent]. Certainly, when gas prices are increasing, even if overall inflation is low, you often -- consumers they see that big sign of [indecipherable] weak and they feel it. That's obviously going in other direction right now. You said in health care. Health care -- the slowest growth we've had on the record in this country and the data goes back to the 1916 was in 2013."

 

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