Inflation's Secret Shrink Are Missing Cities Messing With the Numbers?

Inflation Data: Why Prices From Select Cities Won't Be Included

The U.S. federal government is scaling back its price checks due to staffing shortages, impacting how inflation is calculated. This move has raised concerns among economists about the accuracy of future cost-of-living reports.

Every month, dedicated government employees diligently track the prices of various goods and services across the nation. This data is then compiled to produce the Consumer Price Index (CPI), a key measure of inflation. However, recent developments have disrupted this process.

The Labor Department announced this week that it has reduced the scope of its price checks and even suspended data gathering entirely in certain cities due to insufficient personnel.

Specifically, the agency has taken the following actions:

• Suspended data gathering in Lincoln, Neb., and Provo, Utah in April.
• Halted data gathering in Buffalo, N.Y., this month.

The Bureau of Labor Statistics stated that these reductions are a result of dwindling resources that "can no longer support the collection effort." This situation is linked to a federal government hiring freeze implemented since President Trump took office. Since January, the federal workforce has shrunk by 26,000, according to Labor Department figures.

While the department anticipates a "minimal impact" on the overall inflation rate, it cautions that these cutbacks could introduce greater volatility in regional cost-of-living reports and price information for specific items.

These cuts come at a sensitive time, as economists closely monitor whether President Trump's tariffs might trigger renewed inflation.

Economist Ernie Tedeschi of the Yale Budget Lab, a former member of the Council of Economic Advisers during the Biden administration, emphasized the importance of accuracy:

"This is the worst possible time to make staffing cuts to the CPI of all data sources... Note that staffing cuts don't necessarily mean CPI will come in lower! The error could just as easily be a CPI that's too high, and that's also bad. We want accuracy as we try to navigate the uncertainty."

For the April inflation report, published last month, the government had to rely more heavily on educated guesses for prices, utilizing data from similar items, according to Omair Sharif of Inflation Insights.

Sharif explained the broader implications, stating that "The federal government hiring freeze and the drive to cut funding across federal agencies may be starting to impact the quality of economic data."

Inflation numbers have far-reaching effects. They are closely monitored by the Federal Reserve when setting interest rates, influencing borrowing costs for businesses and families. They also play a role in adjusting government programs like Social Security to account for cost-of-living changes.

"It's not a stretch to say that they affect the lives of everyday folks," Sharif wrote. "Degrading the quality of these statistics only worsens future economic outcomes."

The reduction in price checks and data gathering underscores the importance of maintaining robust and accurate economic data. The implications extend beyond mere statistics, affecting financial policies, social programs, and the daily lives of Americans. Ensuring the integrity of this data remains crucial for informed decision-making and economic stability.

Tags: Inflation, US Economy, Price Checks, CPI, Lincoln Nebraska, Provo Utah, Data Gathering, Staffing Shortages, Cost of Living, Labor Department, Federal Reserve, Economic Data, Bureau of Labor Statistics, Hiring Freeze

Source: https://www.npr.org/2025/06/05/nx-s1-5424367/inflation-data-cpi-government-job-shortages