The CPI Inflation Calculator is an online tool provided by the U.S. Bureau of Labor Statistics that allows users to calculate the change in purchasing power of money over time, based on the Consumer Price Index (CPI). It helps users understand how inflation affects the value of money and the cost of goods and services.
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The CPI Inflation Calculator uses data from the Consumer Price Index, which measures changes in prices paid by consumers for a basket of goods and services.
It can be used to compare prices from any two years between 1913 and the present.
The calculator accounts for inflation, which is the general increase in prices and fall in the purchasing value of money.
It is often used in financial planning, historical price comparisons, and understanding economic trends.
The accuracy of the calculator relies on regularly updated CPI data provided by the Bureau of Labor Statistics.
Review Questions
What primary data does the CPI Inflation Calculator use to measure changes in purchasing power?
How far back in time can you use the CPI Inflation Calculator to compare prices?
Why is understanding how inflation affects purchasing power important for financial planning?
Related terms
Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services.
Inflation: The rate at which the general level of prices for goods and services rises, eroding purchasing power.
Purchasing Power: The financial ability to buy products and services; it declines as inflation increases.