Neighbor News
What's Behind the CPI?
Much of the stock market volatility we have seen lately can be attributed to inflation & the uncertainty it has caused.
October 20, 2022
The Consumer Price Index
The Consumer Price Index (CPI) is defined as “a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.”1 The US Bureau of Labor Statistics releases the CPI every month showing both the monthly and annual change in prices of these goods and services and many view any change in the CPI as the rate of inflation throughout the US economy.
Find out what's happening in Essex-Chester-Deep Riverfor free with the latest updates from Patch.
The CPI looks at price changes on all items and goods purchased by “all urban consumers” in the US, which represents about 93% of the US population.
On October 13 the latest CPI data was released, and it showed that prices rose on average 0.4% in September 2022 and 8.2% over the past 12 months. Much of the stock market volatility we have seen lately can be attributed to inflation and the uncertainty it has caused.
Find out what's happening in Essex-Chester-Deep Riverfor free with the latest updates from Patch.
What goes into the CPI?
The CPI is calculated as a weighted average of the price changes of over 200 categories of goods and services covered by the index. The weight associated with each category is meant to reflect the relative importance of those goods and services to the consumer. For example, the cost of housing (owning or renting) is the largest expense for most Americans, and it will therefore carry a larger weight and have a larger impact on the calculation of the CPI each month.
To continue reading the article, click here
To learn more and follow us on social media, visit: https://linktr.ee/pratocapital
