Does the US government voluntarily underreport inflation?
The Consumer Price Index claims to reflect "changes in the prices paid by urban consumers for a representative basket of goods and services." The "Personal Consumer Expenditures Price Index" is also, I believe, produced by the government.
On their face, such statistics do not seem to show inflation at a particularly high level. However, there seems to be a widespread perception of high inflation in the United States, at least among certain constituencies.
Google was said to be developing an inflation index derived from Web spidering (although, amusingly, a Google search doesn't bring up any primary documents. This caused some excitement because it would presumably work with larger datasets and without any kind of political tampering. But subsequent to an initial flurry of reports, it seems little has come of that.
Are the CPI and PCEPI understating the inflation being experienced by most (or some well-defined subset of) Americans?
UPDATE: MIT's Billion Prices Project http://bpp.mit.edu/usa/ seems to track slightly higher than the CPI and considerably lower than the "Shadow Government" numbers.