Inflation measures the change in the general price level across the economy and is most commonly tabulated by the Bureau of Labor Statistics using a measure called the Consumer Price Index (“CPI”). To construct the CPI, BLS economists assemble a bundle of goods and services that people tend to purchase such as food, fuel, housing, health care, transportation and education. At a high level, they then survey thousands of businesses across several dozen urban areas to determine the prices of this bundle and compare the price in one period to the previous period. Of course, it’s not quite so simple as the above picture suggests. After all, people’s consumption patterns change over time and the economists need to adjust their bundles accordingly (e.g. computers are a much larger part of the consumption bundle today than in the 1970s). Quality can also complicate simple comparisons: a computer today may cost similarly to a computer in 2005, but the processing power, speed and capacity of a modern computer is far superior to its mid-aughts counterparts. That’s why despite similar sticker prices, the BLS records personal computer prices as falling 95% between 1998 and 2015.There are many dueling measures of inflation. The BLS, for instance, also reports “core” CPI, which excludes energy and food costs since those categories are so volatile that they make the overall measure less predictive of future months’ inflation. The Federal Reserve, meanwhile, uses “Personal Consumption Expenditures” (PCE) instead of CPI. Unlike CPI, PCE weights different categories by surveying businesses instead of households, and includes non-urban households in their price measurements. Other technical differences in how the two measures treat substitution and quality changes tend to mean that PCE often slightly undershoots CPI in its inflation measurements.
Release Schedule: https://www.bls.gov/schedule/news_release/cpi.htm The 8th or 9th business day of the month (which normally corresponds to the 10th-13th)Frequence: Monthly