What is CPI? CPI stands for Consumer Price Index and is an indicator for the health of an economy. The Bureau of Labor Statistics( https://www.bls.gov/cpi/ ) is the government branch in the US that is responsible to provide the monthly reports. We as consumers usually notice the impact of inflation with our currency and its purchasing power. I’m sure that most of us that shop for essentials are noticing a decrease in our dollar value or an increase in prices. It is especially noticeable when we buy groceries or fuel our vehicles. These items are included in what is called a ‘market basket’ that has around 200 items that are measured to calculate the yearly and monthly rates. From there, inflation or deflation can be measured and will trigger actions that may need to be taken by the central banks. This is explained in chapter 11 of my book ‘Money Plain and Simple’.
This measurement is also used in many US Government programs to determine if increases are justified for these programs. One of the most popular is the Social Security program. What do you think? Is there a financial incentive for the US Government to keep the reports low? You decide.
From July 2020, over the past 12 months, the CPI rose by 5.4% (not seasonally adjusted). Link to the report: https://www.bls.gov/news.release/archives/cpi_08112021.htm#