groceries in a Manhattan store on January 12, 2022 in New York City. Newly released data shows that inflation grew at its fastest 12-month pace in nearly 40 years during the month of December. It showed a 7% jump from a year earlier, as prices rose on everything from gas to furniture for American shoppers. (Photo by Spencer Platt/Getty Images)" width="4896" height="2769" />
Feb 10th 2022
F OR YEARS if anyone in America worried about inflation, they worried that it might be too low. Now prices are rising much too fast. In January they were an average of 7.5% higher than a year earlier, the fastest rate of inflation measured for 40 years, according to the consumer-price index for all urban consumers, more commonly known as the CPI. The CPI is probably the best known gauge of inflation. Yet calculating the average rise in prices is harder than it seems. How does the CPI work—and is it flawed?
