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You will recall that the official 1.5% inflation rate for food consists of paying 1.5% more for a box of corn flakes or a can of coffee than last year, but with the possibility of a significantly reduced content weight for that box or can. You'll also recall that the official 1.5% inflation rate for food potentially consists of paying 1.5% more for HAMBURGER than you paid for STEAK last year. Well, the official statistics for industrial production have similar 'issues'.
A major 'flaw' in the official industrial production statistics ( one admitted by members of gov't btw ! ) is that no mechanism exists to subtract out the actual value of non-US content re imported sub-assemblies incorporated into US manufactured products. Thus when a Detroit 3 hybrid car is sold, the entire sale price is counted as US production. This overlooks such 'minor details' as an imported engine and transmission assembly from Mexico, imported rare earth magnet electric motors from South Korea, imported engine control computer from China etc. ... instead the gov't counts all of these as if they had actually been produced in America. These same sort of 'minor details' are also overlooked re imported sub-assemblies used by John Deere, Caterpillar, Harley Davidson and damn near every other US manufacturer.
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