Inflation is low but living costs are high. The gap between economists’ numbers and consumer feelings is due to outdated inflation measures.

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This could explain a LOT about the November election.

“The gap between economists’ measurements of economic well-being and what consumers actually said they were feeling puzzled many researchers.”

Because the Fed and researchers measured the cost of living wrong. Still do. They lowered inflation in 1983 by changing the way they measured inflation.

The red line below measures home prices more like they did before 1983. They included the mortgage interest rate as part of the cost of housing. The cost of housing is the monthly mortgage payment not just the cost of rent.

https://www.imf.org/en/Publications/fandd/issues/2024/12/the-true-cost-of-living-marijn-bolhuis


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