Will Higher Prices Show Up in the CPI?

Great ‘toon from the Economist.  Maybe the bureaucrats can argue that the higher commodity price component of goods and services is only temporary and can be counted as a surcharge as not be be included in the inflation stats.  On a more serious note, the Economist writes,

When retailers decide to pass on higher costs to consumers, they are increasingly trying to do so in ways that hint that they still offer value for money. One ruse is to offer a wider range of products in a particular category, including a no-frills version that will remain cheap and higher-quality ones that grow more costly. Another is to raise prices discreetly by offering smaller products. But this can backfire: customers noticed when Kimberly-Clark sold them smaller sheets of toilet paper.

(click here if cartoon is not observable)

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