(NewsNation) — The Consumer Price Index Report released by the Bureau of Labor Statistics showed something NewsNation host Dan Abrams says we all already knew: Prices for consumers have jumped in a big way. What you might not know is how the government measures inflation rates.
Prices for meats, poultry, fish and eggs are up nearly 14% compared to last year. Electricity prices are up more than 11%. Furniture costs are up nearly 16% from last year. Used cars and trucks cost more than 35% more than they did one year ago. That’s according to the latest data from the Consumer Price Index Report.
How does the Bureau of Labor Statistics measuring inflation? According to a new Wall Street Journal article, hundreds of people scattered across the country spend their days recording the costs of various goods and services. The Bureau of Labor Statistics sends price checkers to local grocery stores, mechanics, hair salons, you name it, every month, to measure how their prices have changed over time.
“To be clear, these people aren’t necessarily trained experts with degrees in economics. They’re often just regular folks going out and doing this incredibly important research,” Abrams said Wednesday on “Dan Abrams Live.”
The report states that more than 475 so-called price checkers from around the country compile the prices of thousands of goods and services, sending the data back to Washington to be compiled into the Consumer Price Index each month. The price checkers go through a multi-page list of different data points to make sure they are pricing the same things they did the month prior.
For example, a can of soup has to be checked for 12 different specifications including flavor, size, brand, if it’s labeled organic or packaged in any special dietary features such as “low sodium” or “gluten free.”
Wall Street Journal consumer trends reporter Rachel Wolf joined Abrams to discuss the research. She said she shadowed a price checker a few weeks ago and called the experience fascinating.
“The work that they do is just so precise,” Wolf said. “It’s not a number that fell from the sky. It’s not a room full of economists. It’s real people who are going around asking grocery store workers, mechanics, they might even visit a funeral shop to find out how much it costs to be cremated.”
Wolf says one price checker will visit a dozen different stores over the course of a day, with price checkers broken up into different regions. She said they are given specific instructions.
“It’s not arbitrary. They don’t just go into a store and say, ‘I think today I’m going to look at some eggs and some pancake mix.’ They come armed with a really specific list of goods or services to press. So they might have a can of chicken noodle soup, and they’re going to have to go down that checklist to make sure they’re looking at the exact kind of chicken noodle soup that they looked at last month. So they’ll go to the same exact store and look for the same exact item every month for four years,” Wolf said.
Wolf says while it seems like there could be a faster way to track inflation, she really trusts the numbers after seeing the process for herself.