The credibility of US inflation statistics is coming under increased examination following revelations that over one-third of the August Consumer Price Index (CPI) was based on estimated prices rather than actual figures.
Economists express concerns that the rising reliance on imputed data could undermine the integrity of a crucial indicator for Federal Reserve policy and investor outlooks.
More CPI Prices Are Now “Best Guesses”
The proportion of estimated prices within the US CPI reached 36% in August 2025, as highlighted by market commentary firm The Kobeissi Letter and confirmed by the Bureau of Labor Statistics (BLS) methodology. This figure marks an increase from 32% in July and the highest since the BLS began tracking this metric.
Sponsored
Sponsored
Typically, the CPI is derived from approximately 90,000 monthly price quotes spanning about 200 categories of goods and services, collected by several hundred field agents across 75 urban locations. When actual price data is unavailable, the BLS employs a “different-cell imputation” technique to bridge gaps, utilizing data from related categories or comparable items. Historically, only around 10% of the index needed such estimations.
However, since the latter half of 2024, the reliance on imputation has surged, exceeding 30% throughout 2025. Analysts attribute this spike to data collection issues related to the pandemic, changes in consumer behavior, and challenges in acquiring timely quotes for volatile sectors like housing and medical services.
Markets Eye Fed Policy amid Data Questions
The CPI serves as the Federal Reserve’s main measure of consumer inflation and a foundational element for interest rate and monetary policy decisions. A growing divide between perceived household price pressures and official statistics could complicate the Fed’s inflation-targeting efforts and diminish public confidence in its policy messages.
“Markets depend on the CPI for an accurate assessment of inflation,” stated one independent economist. “If over a third of the index is based on estimations, it creates uncertainty and raises doubts regarding the accuracy of the data in reflecting real consumer expenses.”
If skepticism regarding CPI accuracy continues, jittery investors may lead to increased volatility. In particular, the bond markets might react more sharply to CPI releases if traders suspect that the reported figures do not accurately capture prevailing inflation trends.
Pressure Builds for BLS Transparency
Economists and market actors are calling on the BLS to disclose more information about which CPI components are based on imputed data and the methodologies used to formulate these estimates. While imputation is a recognized statistical method, the current extent of its application has surprised many and underscores the necessity for enhanced transparency.
Currently, the BLS asserts that its methodologies align with established statistical norms. Nevertheless, as the rate of estimated prices reaches unprecedented heights, there is growing pressure on the agency to strengthen confidence in one of the globe’s most scrutinized economic indicators.
