Big Media finally notices, sort of.

Is inflation index out of touch?
The government's Consumer Price Index is up only 4% over the last year -- but for most Americans, the pinch feels much worse. Here's why.

http://articles.moneycentral.msn.com/SmartSpending/ConsumerActionGuide/IsInflationIndexOutofTouch.aspx

Between the gas pump and the grocery checkout, Americans have plenty of reasons to list inflation as Economic Enemy No. 1. But how bad is it, really?

The short answer: Bad enough, but don't judge the problem only by what it costs to fill a fuel tank.

It's not surprising that many people feel as if inflation is running hotter than the government's Consumer Price Index (CPI) suggests: just under 4% over the past year. Many Americans are paying more, especially if they commute long distances or are putting kids through college.

A perception factor is also at work.

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Much more including a nifty chart at the site. However, notable by its absence on that chart is debt service. The urbanites they're looking at are probably spending in that proportion (or were a year ago), but they left out things like credit card and student loan debts, both of which take a big bite out of most budgets and seriously skew the budgets. Nor did they manage to take into account that the housing bubble means they're spending as much as 67% of their income minus debt service on housing. Also, when was the last time you spent only 6.2% of your take on
health care? Among insurance deductions, over the counter medicines and copays, the total is much higher for anyone over 30 and/or with children.

There's a perception problem, all right, but it's not on the consumer end.

There is no way prices have risen just under 4%. I doubt they could find a country in the world where that is true.

I guess I need an education on how they figure the rise and fall of our economy.

.... knows full well the official CPI is a total joke.

And, since CPI is used as a deflator to the GDP numbers, the FACT that we are currently in a recession is just another side effect of the cooked numbers.

GDP, when adjusted for ACTUAL inflation, is negative. We ARE in a recession already, no matter how many times politicians and blowhard MSM commentators try to call it a "slowdown".

The recession is here, serious inflation is here, and the economy is heading south for years.

http://en.wikipedia.org/wiki/Core_inflation

The concept of core inflation as aggregate price growth excluding food and energy was introduced in a 1975 paper by Robert J. Gordon.<1> This is the definition of "core inflation" most used for political purposes.

No wonder official statistics understates real inflation felt by the people