What is the Current Inflation Rate?

So what is the current inflation rate? It sounds like a simple question, but like most questions that involve economic data, there are two answers:

• The official answer. The official answer is what the government is reporting — what they’re claiming is the current inflation rate. This is usually a politically motivated number generated by people who might lose their jobs if they report unfavorable info to the public.

• The real answer. This is the true answer — it’s almost always worse than the official answer. When it comes to inflation, it’s about 3-4x worse. That’s what we’ll be analyzing on this page.

The current inflation rate is somewhere in the 1.5% range, according to the official estimates of the federal government. But how they calculate that rate is a lot different than they used to calculate it — about 300% worse.

Back before the 80s, the inflation rate was calculated with a different emphasis on different products and prices. Think about it: inflation is supposed to be 1.5% right now, but food and energy prices are up 20-40%. For most people, that means their income can buy much less than they used to be able to buy — way less than just 1.5% less.

We’ll be writing more on here about the old way of calculating inflation. For now, just know that the real inflation rate is between 5-7% — at least.