The BLS reports a rise in the CPI of four-tenths of a percent in December. Year-over-year the CPI is up 2.4%.

CPI Month-Over-Month as the BLS Sees Things

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Month Over Month Key Points

•  The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in December on a seasonally adjusted basis after rising 0.2 percent in November
• The seasonally adjusted increase in the all items index was driven by an 8.4-percent increase in the gasoline index, which accounted for more than 60 percent of the overall increase. 
• The other components of the energy index were mixed, resulting in an increase of 4.0 percent for the month. 
• The food index rose in December, as both the food at home and the food away from home indexes increased 0.4 percent. 
• The index for all items less food and energy increased 0.1 percent in December after rising 0.2 percent in the previous month. 
• The indexes for apparel, motor vehicle insurance, new vehicles, personal care, and household furnishings and operations all rose in December. 
• The indexes for used cars and trucks, recreation, and medical care were among those to decline over the month. 

Year-Over-Year Key Points

• The all items index rose 1.4 percent for the 12 months ending December, a slightly larger increase than the 1.2-percent rise reported for the period ending November. 
• The index for all items less food and energy rose 1.6 percent over the last 12 months, as it did in the periods ending October and November. 
• The food index rose 3.9 percent over the last 12 months, while the energy index fell 7.0 percent.

What About Housing?

The BLS does not directly include home prices in the CPI. The latest Case-Shiller home price index is up 8.4% as of the latest report which is for October.

Instead of using home prices, the BLS uses Owners' Equivalent Rent (OER). OER is determined by asking homeowners how much they would expect to pay in rent if they rented their own house from themselves.

Ask anyone looking to buy a home what inflation looks like.

Failure to properly account for housing has distorted the CPI continually from 1998 until now.

The Fed did not spot the housing bubble nor predict the Great Recession because it did not understand the asset bubble.

What About Health Care?

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The BLS says the cost of medical care is up 15% from a year ago.

Ask anyone buying their own health care how accurate that is. Also, ask anyone buying their own health care if it is only 6.97% of their budget as the BLS states.

What About Bubbles?

The stock market and risk tolerance is also a measure of inflation. It is nowhere to be found in the indexes.

Add it all up and the CPI is a gross distortion of reality on many fronts.