How Does Inflation Affect Prices?

The consumer price index (CPI) held steady in April 2000, following a 0.7% increase in March and a 0.5% rise in February. It was the first time the CPI was unchanged since June 1999. So?

The CPI measures the average price for a group of goods and services you and other consumers buy routinely. Energy prices make up about a tenth of the CPI; food prices make up about one-fifth of the index.

Play with this calculator (don’t use commas when entering thousands) to see how inflation affects purchases. Say your house cost $71,000 in 1988. Inflation alone would make it worth about $102,700 today. If your latest appraisal shows your house worth more than that, it’s appreciated beyond inflation. If your latest assessment shows it worth less, then your investment has not kept pace with inflation.

If I bought goods or services in for $ , in the same goods or services would cost about $.

This calculator is solely for informational purposes and provides reasonably accurate results; the calculations are not intended to be relied upon for actual inflation computations.