The Consumer Price Index affects the wages of 2 million workers covered by collective bargaining, the payments to 48.4 million people on Social Security, food stamps for 19.8 million people, and the cost of lunches at school for 26.5 million children. It is used to measure inflation.
The US Department of Labor's Bureau of Labor Statistics makes the index, using the average change in prices paid by urban consumers for a fixed set of goods and services. Categories include food and beverages, housing, and clothing.
In this module we explore how to find the Index on the Internet, convert its history to a table in Microsoft Excel®, graph the data, fit an exponential curve to the data, adjust prices for inflation, and calculate the rate of inflation. The methods can be adapted for other spreadsheets -- the figures and tables will show what functions are needed. Knowledge of college algebra and statistics is helpful but not required.
Acknowledgments: The graphic on this page is clip art copied from The Voice of Agriculture Newsroom, Vol. 77, No. 11, 1998. I wish to thank Editor David A. Smith, Ken Steward and other employees of the Bureau of Labor Statistics, and the anonymous referees for helpful suggestions and encouragement in the preparation of this module.