> A normal household has to pay rent or make mortgage payments. To arbitrarily exclude the biggest expense to consumers from CPI is pretty misleading.
Housing definitely isn't excluded from CPI calculations. In fact housing is by far the biggest single component of the basket used to calculate inflation.[1]
Moreover, there's really no evidence that long-term housing inflation is running faster than the broader economy. In 2019 the average American consumer spent 25% of their income on housing and 15% on shelter.[2] (Aside, "shelter" just includes the cost of rent, mortgage, property taxes and maitenance. Whereas "housing" includes utilities, appliances, furniture, housekeeping, laundry, etc.) In 1990, the average household spent a virtually identical 27% of income on housing and 15% on shelter.[3] If housing was inflating much faster than the rest of the economy, we'd expect to see increasing shares of income dedicated to housing.
Housing definitely isn't excluded from CPI calculations. In fact housing is by far the biggest single component of the basket used to calculate inflation.[1]
Moreover, there's really no evidence that long-term housing inflation is running faster than the broader economy. In 2019 the average American consumer spent 25% of their income on housing and 15% on shelter.[2] (Aside, "shelter" just includes the cost of rent, mortgage, property taxes and maitenance. Whereas "housing" includes utilities, appliances, furniture, housekeeping, laundry, etc.) In 1990, the average household spent a virtually identical 27% of income on housing and 15% on shelter.[3] If housing was inflating much faster than the rest of the economy, we'd expect to see increasing shares of income dedicated to housing.
[1]https://www.bls.gov/cpi/tables/relative-importance/2020.htm [2]https://www.bls.gov/cex/2019/standard/multiyr.pdf [3]https://www.bls.gov/cex/1990/Standard/income.pdf