The credibility of US inflation data is being questioned, with economists warning that there is too much "guesswork" involved in the CPI statistics.

The reliability of U.S. inflation statistics is under rigorous scrutiny. Earlier reports indicated that in the August 2025 consumer price index (CPI), over a third of the data relied on estimates rather than actual observed prices. Economists warn that the increasing reliance on estimated data is threatening the credibility of this key Benchmark for Fed policy and investor expectations.

CPI Estimated Price Share Soars, Has Become the "Best Guess"

According to market commentary from The Kobeissi Letter, emphasized and confirmed by data from the U.S. Bureau of Labor Statistics (BLS) methodology, the estimated price share in the U.S. CPI rose to 36% in August 2025. This percentage is higher than the 32% in July, and it is also the highest percentage since the BLS began tracking this metric.

In general, the CPI is compiled by hundreds of field staff in 75 urban areas, collecting about 200 categories of goods and services with approximately 90,000 price quotes each month. When price data is missing, the BLS uses a technique called "different-cell imputation" to fill in the gaps, which involves inferring data from related categories or comparable goods. Historically, only about 10% of the index required this estimation.

However, since the second half of 2024, the reliance on interpolation methods has sharply increased, exceeding 30% throughout 2025. Analysts attribute this growth to data collection challenges related to the pandemic, changes in consumption patterns, and difficulties in obtaining timely quotes for volatile categories such as housing and healthcare services.

Data in Doubt, Market Focus on Fed Policy Trends

CPI is the main indicator used by the Fed to measure consumer inflation and is the cornerstone for its interest rate and monetary policy decisions. If there is an increasingly widening gap between the public's perception of household price pressures and the official data, it may complicate the Fed's inflation targeting strategy and erode public confidence in its policy signals.

An independent economist stated: "The market relies on CPI to clearly interpret inflation. If more than one-third of the index is based on estimates, it introduces noise and raises doubts about the data's ability to accurately reflect the true cost of living for consumers."

If doubts about the accuracy of CPI persist, investors who are already anxious about the Fed's next move may become even more unsettled. This is especially true for the bond market, where traders may react more violently to the release of CPI data if they suspect that the headline figures underestimate the actual inflation trend.

Increased Transparency Pressure on BLS

Economists and market participants are urging the BLS to provide more details on which CPI components rely on imputed data and how these estimates are derived. While imputation is a standard statistical practice, the current scale of its use has surprised many observers and underscores the need for robust information disclosure.

Currently, BLS adheres to its procedures in accordance with established statistical standards. However, as the proportion of estimated prices reaches record levels, the agency faces increasing pressure to reshape confidence in one of the world's most closely watched economic indicators.

Conclusion

The estimated share in the US CPI data has risen to a historical high, which is not only a technical issue of statistical methods but also a core challenge related to market confidence and policy effectiveness. When more than a third of the data relies on "best guesses" rather than actual observations, the foundation of this key economic indicator is being eroded. It undermines the market's judgment of the true trends in inflation, adds complexity to the Fed's policy communication and interest rate path, and may amplify volatility in financial markets.

The current situation is the result of multiple factors—from the data collection dilemmas of the post-pandemic era to structural changes in consumption. However, explaining the reasons cannot replace data transparency and accuracy. The U.S. Bureau of Labor Statistics (BLS) is facing increasing calls to enhance the visibility of its data composition and estimation methods in order to maintain its credibility.

In the current environment where inflation conditions and policy expectations are highly sensitive, it is crucial to rebuild trust in CPI data among all parties. Without clearer disclosures and more reliable collection mechanisms, not only is the market likely to fall into a haze of self-speculation, but central bank decision-making may also struggle to move forward in the dilemma of "ambiguous data." The quality of the data will ultimately determine the quality of the decision-making.