Business: Gauging Prices--and Spending

New CPI shows more inflation than expected

The nation's most widely watched measure of inflation by far is the Bureau of Labor Statistics' consumer price index. As inflation has embedded itself in American life, the CPI has become possibly the most important economic statistic issued by the Government. Escalator clauses tie the incomes of perhaps half of all Americans to movements in the CPI; among them are 8.5 million wage earners, 31 million Social Security recipients, 20 million people who receive food stamps, and 2.5 million retired military and federal employees. But the index has had two serious drawbacks: it is based...

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