How the Inflation Rate Is Measured: 477 Government Workers at Grocery Stores

To calculate how much prices are rising, hundreds of government workers spend their days tracking down costs for individual goods and services

By Rachel Wolfe of The WSJ.

Students sometimes asked how the government (The Bureau of Labor Statistics or BLS) gets the data for the Consumer Price Index. The is article covers it.

Excerpts:

"477 workers employed by the federal government to track changing prices for hundreds of thousands of goods and services every month. The culmination of their work is the Consumer Price Index"

"A typical day on the job might take Ms. Mascitis [Emily Mascitis, one of the price checkers] to a beauty salon to check the price of a blowout, to a jeweler to see what a strand of pearls costs and a funeral parlor to learn what it is charging for cremation services."

"Participation in the CPI is voluntary for businesses"

"The job of a price-checker is exacting. To price an item, workers go through an up to 11-page list of data points to make sure they are pricing the same item they did the prior month. A can of soup has 12 different specifications, including flavor, size, brand, organic labeling, material of the packaging and dietary features, such as sodium content."

"Supply-chain shortages have made it more difficult to check prices from month to month over the pandemic, since goods are often out of stock"

"The BLS tracks prices for up to 100,000 goods and services, and 8,000 housing units every month. The agency decides which items to price using census-collected data on buying habits, making sure the measurements reflect the way Americans spend their money and rotating items out after four years."

Consumer Price Index Data from 1913 to 2022.