Does anyone know the current rate of inflation?
And is this rate the same as the current cost of living?
How are those two numbers related?
Thank you.
Key Economic Indicators given at that site state +0.2% monthly calculated from the Consumer Price Index.
The CPI (Consumer Price Index) is one measure of inflation, often termed the cost of living. The way most countries measure the CPI is by regularly surveying the prices of a standardised basket of goods and comparing these over time. It’s expressed as an index with a base of 100.
For instance, if the base was set at 100 in June 2000 and had increased to 108 in August 2001 we say that there has been an 8% rise in the CPI measure of inflation (or the cost of living) from June 2000 to August 2001.
The monthly figures you see are the monthly percentage changes.
I could go into a lot of stuff about the shortcomings of CPI measures (survey methods, marginal rates of substitution etc) but frankly it’d bore your pants off. As a general rule the CPI tends to overstate the actual increase in the short term at least.
Also, any such measures are weighted because different products, industries, geographic areas have different levels of inflation. As a simple example, the rise in the cost of new housing is on the the elements that goes into the calculation of CPI. However, if you’re not buying a new house, that aspect of the overall economy is pretty much irrelevant to you.
Off track a bit, but here’s a site I refer to occasionally with a calculator for comparing a dollar today to previous times: http://www.cjr.org/resources/inflater.asp