What people always get wrong about inflation statistics is that they’re really only meaningful when talking about the whole country. If you think CPI is wrong, well, it’s wrong for you. It’s wrong for every individual. But it’s right when you average everyone out.

For example, let’s say you have a fixed rate mortgage on the home you own and live in. If house prices skyrocket because supply is restricted, that inflation doesn’t affect you. Or let’s say you spend $200 per month on food out of a total budget of $4000. If food prices go up uniformly 20%, but nothing else changes for all the other stuff you buy (ie, you’re paying $40 more per month than you were before), you’re effective inflation rate is 1%.