Krugman says “Disinflation Confirmed”. Because if you remove housing from US core inflation the graph still slides downwards.
Let’s see – Core inflation means inflation minus food and energy. Then you remove housing. And as part of inflation calculations you do “hedonic adjustments” – that you can get a BETTER product for the same price – like a TV at $330 has more features than last year, so you reduce the price of the TV in your inflation index price set to say $195. Then they do “substitution” – meaning if the price of beef goes up then people will buy something cheaper, say chicken, so you put the cheapest of the lot in the index. And “reweighing” meaning people use less of what’s expensive, so reduce it’s weight.