Inflation Is Worse Than the CPI Shows, Says Ex US Comptroller

Faced with runaway inflation during World War I, the US Department of Labor came up with a handy tool. A single figure, the Consumer Price Index, would measure the changing cost of a basket of everyday items. More than a century after its national debut in 1921, the CPI now encompasses 80,000 goods and services, from baby formula to college tuition. The index is used to adjust Social Security payments, federal income tax brackets and commercial rents, and it influences employer decisions on wages and salaries.

The problem with this dependence on a single indicator is that not all ...