Is CPI a sham? Inside the ‘guesswork’ behind America’s inflation data
For decades, investors and economists have anchored their inflation expectations to the Consumer Price Index (CPI), the U.S. government’s flagship measure of inflation.
However, growing concerns over data quality are raising doubts about how accurately the CPI reflects real-world price pressures.
“CPI inflation data quality continues to decline,” wrote The Kobeissi Letter, a market commentary, pointing to questionable data-filling practices at the Bureau of Labor Statistics (BLS).
CPI inflation data quality continues to decline:
undefined The Kobeissi Letter (@KobeissiLetter) November 9, 2025
In September, 40% of CPI items were estimated, up from 36% in August.
When price data is unavailable, the BLS undefinedfills the gapsundefined with estimated values, which typically account for ~10% of all CPI entries.
The percentage has now… pic.twitter.com/U7McVcy2rl
In September, roughly 40% of the items in the CPI basket were estimated rather than directly observed, meaning BLS economists had to fill in gaps where price data was missing. That’s quadruple the typical rate of around 10%, sparking concerns that the index may no longer capture true consumer costs.
“CPI numbers are becoming less accurate and less reflective of real consumer costs every month,” The Kobeissi Letter added, while noting that the guess-work has become more apparent since the start of the year.
Such discrepancies matter. Markets and policymakers closely track inflation readings to assess the economy’s health and anticipate the Federal Reserve’s next moves. According to official BLS data, the CPI rose 3% year-over-year in September, suggesting a moderate pace of inflation.
Yet many analysts remain skeptical. Macro strategist Charlie Bilello has highlighted what he calls the “absurdity” of CPI data showing that the cost of health insurance has fallen 30% over the past two years, which contradicts the reality of millions of Americans.
The most absurd number in CPI?
undefined Charlie Bilello (@charliebilello) August 14, 2024
According to the US Government, the cost of health insurance has declined 30% over the last 2 years and 8% over the last 5 years...https://t.co/l5IYmkf6Ih pic.twitter.com/ZelJW4lhRg
Bilello’s analysis shows that average U.S. health insurance premiums have surged 365% since 1999, rising about 6.1% per year — more than double the rate of overall CPI over the same period.
Average US family health insurance premium...
undefined Charlie Bilello (@charliebilello) October 23, 2025
1999: $6k
2003: $9k
2007: $12k
2011: $15k
2015: $18k
2019: $21k
2023: $24k
2025: $27k
That's a 365% increase since 1999 (6.1% per year).
(Note: US CPI inflation has increased 2.6%/year) pic.twitter.com/xgehY2a5xo
Is Trump vindicated?
The BLS’ apparent “guesswork” appears to play into President Trump’s long-held criticism that official economic data amounts to “fake news,” particularly when it comes to inflation.
Trump has repeatedly claimed that “inflation has been defeated” and that “we don’t have any inflation,” even as CPI data suggests otherwise.
While his remarks are often politically charged, aimed at framing his tariff policies as non-inflationary, they have reignited debate over the credibility of government economic figures.
Trump’s comments have also been directed at the Federal Reserve, which he has urged to cut interest rates more aggressively to stimulate growth.
Until recently, however, the Fed had been hesitant to cut rates, citing persistent inflation reflected in both the Consumer Price Index and the Core Personal Consumption Expenditures (PCE) index, the latter being the Fed’s preferred inflation gauge.
Trump ultimately got his way: the Federal Reserve cut interest rates at both its September and October policy meetings, and markets widely expect another reduction in December.