How Do You Calculate Inflation Rate From CPI?
A Consumer Price Index (CPI) number is a measurement of the price level of the U.S. economy at a point in time. Every month, employees of the U.S. Bureau of Labor Statistics (BLS) record the prices of the “market basket,” a compilation of the goods and services that the average consumer buys. Using this data, the BLS determines the CPI for that month. The CPI is a convenient way to watch changes in the price level. One of the main uses of the CPI is to determine the inflation rate (the rate of change of the price level over a period of time). Find the CPI numbers for the first and last years of the period for which you want to determine the interest rate. This information is published on the Bureau of Labor Statistics website. Subtract the CPI of the most recent year from the CPI of the first year. For example, if the CPI in the first year was 190.3 and the CPI from the most recent year was 196.8, the result would be 6.5 (196.8 — 190.3 = 6.5). Divide the result of the last step by the
