![]() ![]() How does the government get price data for the CPI? The federal government uses a version of the CPI- the CPI for Wage Earners and Clerical Workers-to adjust Social Security benefits for inflation. For instance, Americans spend more on chicken than tofu, so changes in the price of chicken have a greater impact on the CPI. Different prices are weighted according to how important they are to the average consumer. The BLS uses a survey of American families called the Consumer Expenditures Survey to determine which items go in the basket and how much weight to assign to each item. The CPI is constructed each month using 80,000 items in a fixed basket of goods and services representing what Americans buy in their everyday lives-from gasoline at the pump and apples at the grocery store to cable TV fees and doctor visits. It’s an average, though, and doesn’t reflect any particular consumer’s experience. The primary CPI (CPI-U) is designed to measure price changes faced by urban consumers, who represent 93% of the U.S. ![]() ![]() ![]() The Consumer Price Index (CPI), produced by the Bureau of Labor Statistics (BLS), is the most widely used measure of inflation. That turns out to be more complicated than it sounds. The government measures inflation by comparing the current prices of a set of goods and services to previous prices. Inflation refers to changes over time in the overall level of prices of goods and services throughout the economy. ![]()
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