Consumer Price Index

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Consumer Price Index

• Economics University
• By Steven Reff and Dick Brunelle
• http//apecon.us/CPI.gif

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The CPI Consumer Price Index
Year CPI Change
1983 99.6 3.2
1984 103.9 4.2
1985 107.6 3.6
1986 109.6 1.9
1987 113.6 3.6
1988 118.3 4.1
1989 124 4.8
The CPI is published by the Bureau of Labor and
Statistics each month. The base year is always
100 As you can tell by this chart the base year
is in the beginning of 1984
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The CPI Consumer Price Index
Year CPI Change
1983 99.6 3.2
1984 103.9 4.2
1985 107.6 3.6
1986 109.6 1.9
1987 113.6 3.6
1988 118.3 4.1
1989 124 4.8
Now look at the years 1986 and 1987.
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Notice that the increase in the CPI is 4 points,
yet the percent increase form 1986 to 1987 is 3.6
Why?
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The CPI Consumer Price Index
Year CPI Change
1983 99.6 3.2
1984 103.9 4.2
1985 107.6 3.6
1986 109.6 1.9
1987 113.6 3.6
1988 118.3 4.1
1989 124 4.8
Take the two consecutive years CPI find the
difference.
113.6 - 109.6 4
Now, divide the 4 by the original years CPI
109.6 / 4 .0364
Finally, times .0364 by 100 3.64