Visit the Bureau of Labor StatisticsLinks to an external site. website and explo
ID: 1105932 • Letter: V
Question
Visit the Bureau of Labor StatisticsLinks to an external site. website and explore the Consumer Price Index section. Read the "Current CPI Economic News Releases" and summarize the latest release. Did the CPI increase or decrease? What caused the index to increase or decrease? Explain. Visit the inflation calculatorLinks to an external site. section to see how the buying power of the dollar has changed over the years. Experiment with different amounts and different starting years and report your findings. What's the story the data is communicating?
Explanation / Answer
In September, the Consumer Price Index for All Urban Consumers increased 0.5 percent seasonally adjusted; rising 2.2 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy rose 0.1 percent in September (SA); up 1.7 percent over the year (NSA)
CPI increased 0.5.
Both types of inflation cause an increase in the overall price level within an economy. ... Cost-push inflation, on the other hand, occurs when prices of production process inputs increase. Rapid wage increases or rising raw material prices are common causes of this type of inflation and the vice versa.
Inflation has caused prices to rise 784% over the past 60 years. But not all prices rise at the same rate. Prices of gas, beef and Hershey's chocolate have increased more than ten-fold since 1954, much more than inflation. The prices of eggs and coffee have more than doubled and tripled respectively. But on an inflation-adjusted basis, both of these goods cost about half what they did when your grandma bought them.
The story of data indicates how the value of money is getting decreased and the prices of goods and services are going high year after year.
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