# Inflation

**URL:** <https://boards.straightdope.com/t/inflation/76108>\
**Category:** Factual Questions\
**Created:** [August 13, 2001, 10:12pm UTC](https://boards.straightdope.com/t/inflation/76108 "2001-08-13T22:12:26Z")\
**Posts on this page:** 5\
**Page:** 1

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**Author:** ![Squier84](https://avatars.discourse-cdn.com/v4/letter/s/bc8723/32.png) [@Squier84](https://boards.straightdope.com/u/Squier84)\
**Post date:** [August 13, 2001, 10:12pm UTC](https://boards.straightdope.com/t/inflation/76108/1 "2001-08-13T22:12:26Z")

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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.

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**Author:** ![Ringo](https://avatars.discourse-cdn.com/v4/letter/r/779978/32.png) [@Ringo](https://boards.straightdope.com/u/Ringo)\
**Post date:** [August 13, 2001, 10:26pm UTC](https://boards.straightdope.com/t/inflation/76108/2 "2001-08-13T22:26:22Z")

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[Key Economic Indicators](http://www.econedlink.org/lessons/index.cfm?lesson=EM168) given at that site state +0.2% monthly calculated from the Consumer Price Index.

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**Author:** ![Motog](https://avatars.discourse-cdn.com/v4/letter/m/85e7bf/32.png) [@Motog](https://boards.straightdope.com/u/Motog)\
**Post date:** [August 14, 2001, 4:11am UTC](https://boards.straightdope.com/t/inflation/76108/3 "2001-08-14T04:11:23Z")

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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.

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**Author:** ![C\_K\_Dexter\_Haven](https://avatars.discourse-cdn.com/v4/letter/c/b2d939/32.png) [@C\_K\_Dexter\_Haven](https://boards.straightdope.com/u/C_K_Dexter_Haven)\
**Post date:** [August 14, 2001, 12:50pm UTC](https://boards.straightdope.com/t/inflation/76108/4 "2001-08-14T12:50:59Z")

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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.

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**Author:** ![Bill\_H](https://avatars.discourse-cdn.com/v4/letter/b/a5b964/32.png) [@Bill\_H](https://boards.straightdope.com/u/Bill_H)\
**Post date:** [August 14, 2001, 12:55pm UTC](https://boards.straightdope.com/t/inflation/76108/5 "2001-08-14T12:55:12Z")

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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](http://www.cjr.org/resources/inflater.asp)