Using an alternative methodology, Moody’s Analytics estimates inflation instead remained unchanged at around 3.0%.
Zandi said a key problem stems from October’s CPI calculation, when the BLS was unable to conduct its full price survey due to the US government shutdown. In response, the agency assumed prices for most goods and services were unchanged, an assumption Zandi said was unrealistic. Moody’s Analytics replaced those assumptions with private-sector price data where available, and forecasts where necessary, to reconstruct October inflation.
He also flagged distortions in November’s CPI data due to delayed survey collection. November pricing patterns are particularly sensitive to timing, Zandi said, with stronger price increases typically seen early in the month before discounting intensifies ahead of the holiday shopping season. Adjusting for this timing bias, Moody’s estimates core CPI inflation at close to 3.0% year-on-year, rather than the lower official reading.
Beyond timing issues, Zandi pointed to growing structural weaknesses in CPI measurement. Budget cuts and staffing shortages at the BLS have sharply increased reliance on imputed prices, with nearly one-third of CPI components no longer directly observed, up from roughly one-tenth earlier this year.
As a result, Zandi warned that “noise is increasingly drowning out the signal” in inflation data
