Wonderful piece from Consumer Reports, Inflation’s sharp pinch on your bottom line. They break down what the CPI means, how it is arrived at, and why it is that it doesn't seem to match up with the reality we face day to day.
The article also mentions the website Shadow Government Statistics, where if you delve into it you can see that these skewed inflation statistics aid in skewing GDP as a useful statistic as well, since it is adjusted for inflation. That is, it makes overall growth of the economy look rosier than it really is.
In the end, these changes to the calculations make useful tools for pushing more sacrifices onto working people. For the economists, though, they turn to more accurate statistics if their real interest is figuring out where the economy is going. But then, most economists don't dare buck the consensus for fear that things might start to appear as bad as they really are.
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