US financial markets breathed a big sigh of relief April 15 when the government reported a 9.8% jump in US retail sales during March, showing recovery from February’s unexpected decline.

Dare investors hope that the Jerome Powell Fed will find a Goldilocks path of buoyant growth with less-than-horrific inflation? That depends on whether you believe the Bureau of Labor Statistics or your own eyes.

The biggest increase in retail sales (comparing the January-March 2021 quarter to the fourth quarter of 2020) came from motor vehicles and parts. According to the well-respected Mannheim Index, which uses sophisticated adjustments to estimate used car prices, the cost of used cars has risen by about 30 percent since the Covid crisis began.

The Bureau of Labor Statistics says that the used car and truck component of its Consumer Price Index rose only 8 percent. I think Mannheim is closer to the truth.

Four groups of retailers accounted for almost three-fourths of the quarter-on-quarter increase in retail sales. Motor vehicles headed the list, followed by pharmacies (not surprising during a pandemic), building materials and gasoline stations.

The gasoline price jumped from about $2.20 a gallon to nearly $2.90 between the last quarter of 2020 and the first quarter of 2021, so the increase in gas station sales is almost entirely inflation.

What about building materials? With home prices rising at an 11.5% annual rate, homeowners are investing in their homes in response to home price inflation.

So we have inflation in vehicle prices, inflation in gas prices, inflation in home prices, and pandemic spending on health care reflected in the biggest gainers in retail sales.

“Who are you going to believe? Me, or your own eyes?” – that was Groucho Marx’s line.

To adopt another Groucho-ism, the Federal Reserve is saying, “These are the inflation numbers, and if you don’t like them, well, I’ve got others.” The market will trade not on the actual inflation data but on the inflation data the government reports because, in the Fed’s positive feedback loop, only the inflation that the government reports will influence future monetary policy.

The truth will out eventually, and the Federal Reserve will have some very unpleasant choices to make.