What is inflation? Is it the result of too many holiday meals? Well, yes, but we’re talking about a different kind of inflation here.

According to the Merriam-Webster dictionary, inflation is defined as:

Inflation /noun

in·​fla·​tion | \ in-ˈflā-shən \

Definition of inflation:

1: an act of inflating : a state of being inflated 2: a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services.

We will focus on the second definition today.

Inflation is the measurement of the change in the overall price of goods and services in the economy over time. The CPI (Consumer Price Index) is the most widely used measurement of inflation. The CPI is constructed each month of 80,000 goods and services items (no, I’m not going to list the items here) that is intended to represent the what we Americans are buying as we go about our lives. For 2021, the US inflation rate was 7.0%.

2 – With the US inflation rate at 7.0% for 2021, what were the top 5 and bottom five categories?

3 – So, what is the U.S. inflation rate history for the past 10 years?

4 – Ok, the US inflation rate for 2021 was 7.0%. How did other countries rank for 2021?

5 – Last but not least, are Social Security benefit payments adjusted for inflation? Yes, but the SSA does not use the same CPI inflation measurement. Legislation was enacted in 1973 adding COLA adjustments to Social Security and Supplemental Security Income (SSI) to help keep pace with inflation. But… the inflation measurement used is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), different than the CPI. For instance, in 2021 the CPI inflation rate was 7.0% and the CPI-W was 5.9%.

Well, there you have it. Hope you found the information interesting and useful.

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