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Question

http://data.bls.gov/cgi-bin/surveymost?cu - http://data.bls.gov/cgi-bin/surveymost?cu

What was the consumer price index (CPI-U) in May 2017 (using 1982-1984 as the base year)?

What was the consumer price index (CPI-U) in May 2016 (using 1982-1984 as the base year)?

Using your answers from question ‘1’ and ‘2’, calculate the rate of inflation from 2016 to 2017.

Repeat steps 1-3 using 1967 as the base year. What is different/same in your answers? Explain why there are these differences/similarities.

Calculating Unemployment (Answer the following questions for May 2017)

http://data.bls.gov/cgi-bin/surveymost?ln - http://data.bls.gov/cgi-bin/surveymost?ln

What was the size of the labor force?

What was the number of unemployed workers?

What was the unemployment rate?

What was the labor force participation rate?

Based on your answers to number 5 and number 8 what was the size of the civilian population over the age of 16 in May 2017?

Explain what the U-6 level of unemployment is and report what the level of U-6 unemployment was in May 2017?

Explanation / Answer

1.) from the website {https://www.bls.gov/regions/new-england/data/consumerpriceindex_us_table.htm}

CPI of May 2017 ( under the base year 1982-1984 ) is 244.733.

2.) from the website {https://www.bls.gov/regions/news-england/data/consumerpriceindex_us_table.htm}

CPI of May 2016 ( under the base year 1982-1984 ) is 240.229.

3.) Rate of inflation = [{CPI of 2017 - CPI of 2016} / CPI of 2016 ] * 100
= [{ 244.733 - 240.229} / 240.229 ] * 100
= 1.87%

4.) from the website {https://www.bls.gov/regions/midatlantic/data/consumerpriceindexhistorical1967base_us_table.htm}

CPI of May 2017 ( under the base year 1967 ) is 733.110.
CPI of May 2016 ( under the base year 1967 ) is 719.619.

Rate of inflation = [{CPI of 2017 - CPI of 2016} / CPI of 2016 ] * 100 ( under the base year 1967 )

= [{ 733.110 - 719.619} / 719.619 ] * 100
= 1.87%

CPI of MAY 2016 and MAY 2017 with respect to base year 1982 - 1984 & 1967 are completely diffrent from each other due to :
1. substitution of one product for another,
2. substitutions among stores,
3. improvements in the quality of products and services, the effect of substitutions.
4. biases arising from new goods,
5. sources of error arising during the calculation of basic indices.

Where as,. similarities between CPI of MAY 2016 and MAY 2017 with respect to base year 1982 - 1984 & 1967 are none; but the rate of inflation for the time period of May 2016 - May 2017 with respect to both base year 1982 - 1984 & 1967 are same i.e., 1.87 as the change in CPI with respect to base year was equal in in case of both base year. so the resulted outcome of the rate of inflation remained to be the same.

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