Does Fed buy groceries?

Image representing iPad as depicted in CrunchBaseImage via CrunchBase
Opinion Journal:

The Federal Reserve has been on a media campaign to sell its monetary policy to average Americans, but this hasn't always gone smoothly. Witness last week's visit to Queens, New York, by New York Fed President William Dudley, who got a street-corner education in the cost of living.

The former Goldman Sachs chief economist gave a speech explaining the economy's progress and the Fed's successes, but come question time the main thing the crowd wanted to know was why they're paying so much more for food and gas. Keep in mind the Fed doesn't think food and gas prices matter to its policy calculations because they aren't part of "core" inflation.

So Mr. Dudley tried to explain that other prices are falling. "Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," he said. "You have to look at the prices of all things."

Reuters reports that this "prompted guffaws and widespread murmuring from the audience," with someone quipping, "I can't eat an iPad." Another attendee asked, "When was the last time, sir, that you went grocery shopping?"

...
I recently bought a new clothes dryer. I was looking for a gas model. Home Depot only had one and it had been marked down from nearly $500 to $77. I jumped on the deal and told the salesman that was less than a week's worth of groceries. While I did have to pay for a propane conversion kit and make the change, it was still well worth it.

I think one of the reason that inflation numbers are so misleading is that the deflation in the housing market is hiding the rising prices for fuel and groceries. The basic things that everyone needs are costing more at a time when most people are not in the market for a new house.

With fewer home sales there are also fewer purchases of items like washers and dryers, not to mention things like wallpaper and carpet.
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