Consumer Price Index (CPI) Report
The Consumer Price Index (CPI) is a measure of the average change in prices paid by urban consumers for a basket of consumer goods and services. The CPI is calculated by the Bureau of Labor Statistics (BLS) and is published monthly.
1. What month (and year) is summarized? What was the level of the CPIU for that month? (See Table 1 ―Consumer Price Index for All Urban Consumers‖). What does this number represent?
The data I used for this report is from the June 2023 Consumer Price Index report. The level of the CPIU for June 2023 was 296.34. This number represents the average price of a basket of consumer goods and services in June 2023, relative to the average price of the same basket in 1982-84.
2. What was the rate of inflation (percentage change in the CPIU) for the last available month? How does that rate of inflation compare with the rate in the previous month?
The rate of inflation for the last available month (May 2023) was 0.3%. This is higher than the rate of inflation for the previous month (April 2023), which was 0.2%.
3. What was the rate of inflation (percentage change in the CPIU) for the last 12 months for ―all items‖?
The rate of inflation for the last 12 months (June 2022 – June 2023) for all items was 3.0%.
4. Which two categories of goods or services had the greatest price increase for the last 12 months? Which two categories of goods or services had the lowest price increase for the last 12 months?
The two categories of goods or services that had the greatest price increase for the last 12 months were transportation and shelter. Transportation prices increased by 8.2%, and shelter prices increased by 5.7%. The two categories of goods or services that had the lowest price increase for the last 12 months were apparel and recreation. Apparel prices increased by 2.6%, and recreation prices increased by 2.3%.
5. Which two categories of goods or services had the largest price decrease for the last 12 months?
The two categories of goods or services that had the largest price decrease for the last 12 months were communication and education and communication. Communication prices decreased by 0.5%, and education and communication prices decreased by 0.3%.
6. Who loses from inflation?
People who lose from inflation are those who have fixed incomes, such as retirees and people on fixed salaries. Inflation erodes the purchasing power of their incomes, meaning that they can buy less with their money.
7. Who benefits from inflation?
People who benefit from inflation are those who have variable incomes, such as people who own businesses or who work in sales. Inflation can increase their incomes, as they can charge more for their goods or services.
8. Please analyze and discuss the significance of the data that you received for this Data Exercise.
The data I received for this data exercise shows that the rate of inflation is increasing. This is a concern, as it can erode the purchasing power of people’s incomes and make it more difficult for them to afford basic necessities. The data also shows that some categories of goods and services are experiencing higher rates of inflation than others. This can have a significant impact on people’s budgets, as they may have to spend more money on certain items.
9. Reflect on what you have learned from this exercise.
I learned a lot from this exercise. I learned how the CPI is calculated and how it can be used to measure inflation. I also learned about the different categories of goods and services that are included in the CPI, and how their prices can fluctuate over time. I am grateful for the opportunity to have completed this exercise, as it has given me a better understanding of inflation and its impact on people’s lives.
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