The quality of CPI inflation readings has hit a rough patch lately:

October brought a troubling milestone—40% of core CPI components relied on statistical estimates rather than direct measurement. Breaking that down: 22 percentage points came from imputed rental costs, while another 18 points stemmed from other goods and services. That's a substantial chunk of the index built on projection rather than observation.

Normally, the BLS constructs CPI inflation using approximately 90,000 price observations across different categories. When estimation fills that void at this scale, it raises legitimate questions about the signal we're actually getting from the headline numbers.