Now that the shutdown is over, we’ll get an
avalanche of government-reported dataover the coming days and weeks.
But at least one of those figures — Consumer Price Index (CPI) — will be “subject to significant error” for months.
“Since the CPI price collection relies upon field staff visiting shops, some of the October data will never be collected,” write
the Cleveland Fed’s Randal Verbrugge and Sara Millington (via CNNMoney’s Annalyn Kurtz). “As a result, the November CPI release, which is based upon October data, will have a much bigger standard error due to the smaller sample.”
One would think that the problem would just right itself after November, but not all prices are collected every month, so “not all of the error will be reversed right away.”
In fact, it will take six more months. “This period is so long for cost reasons. The BLS has divided all the goods and services it collects prices on into three categories: goods whose prices are collected each month in all cities; goods whose prices are collected only every other month in most cities (exceptions are Chicago, Los Angeles, and New York City, where all commodities and services except rents are priced monthly); and rents. Rents are collected only every six months; if the rental price on a particular rental unit is collected in January, then the rent on that unit will next be collected in July,” they write.
“However, year-over-year inflation estimates will continue to be quite reliable,” they write.