From the course: Economic Indicators

Unlock this course with a free trial

Join today to access over 22,600 courses taught by industry experts.

Pulling inflation indicators together

Pulling inflation indicators together

From the course: Economic Indicators

Start my 1-month free trial Buy for my team

Pulling inflation indicators together

“

- In 1995, I graduated high school and was offered a job for $45,000 a year. Today, because of inflation, that would be $88,000. Inflation impacts how far your dollars go, your wages, your savings, and it can impact interest rates that you pay on your mortgage. There are a lot of different inflation reports, Consumer Price Inflation, Personal Consumption Expenditures, and Producer Inflation. Plus these are just a few of the pieces in the US inflation jigsaw puzzle. So how do we reconcile this bonanza of inflation data? Let's think of inflation in two parts, producers and consumers. At the top is consumer inflation, which shows up in the Consumer Price Index, which is known as a CPI. Employers and manufacturers often use the CPI, the Consumer Price Index, in their contracts. This is also used in tax laws. As a Consumer Price Index, it reflects what consumers pay. Another measure of consumer inflation is the Personal Consumption Expenditures, or PCE. It's different from the CPI, but the…

Contents