Part 2: The Inflation Rate

Complete the following exercise:

CONSUMER PRICE INDEX - JUNE 2022

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3 percent in June on a

seasonally adjusted basis after rising 1.0 percent in May, the U.S. Bureau of Labor Statistics

reported today. Over the last 12 months, the all items index increased 9.1 percent before seasonal

adjustment.

The increase was broad-based, with the indexes for gasoline, shelter, and food being the largest

contributors. The energy index rose 7.5 percent over the month and contributed nearly half of the

all items increase, with the gasoline index rising 11.2 percent and the other major component

indexes also rising. The food index rose 1.0 percent in June, as did the food at home index.

The index for all items less food and energy rose 0.7 percent in June, after increasing 0.6

percent in the preceding two months. While almost all major component indexes increased over the

month, the largest contributors were the indexes for shelter, used cars and trucks, medical care,

motor vehicle insurance, and new vehicles. The indexes for motor vehicle repair, apparel,

household furnishings and operations, and recreation also increased in June. Among the few major

component indexes to decline in June were lodging away from home and airline fares.

The all items index increased 9.1 percent for the 12 months ending June, the largest 12-month

increase since the period ending November 1981. The all items less food and energy index rose 5.9

percent over the last 12 months. The energy index rose 41.6 percent over the last year, the

largest 12-month increase since the period ending April 1980. The food index increased 10.4

percent for the 12-months ending June, the largest 12-month increase since the period ending

February 1981.

Item A Item B Item C Year I 112.500 225.000 110.000 Year II 121.500 243.000 128.000 Change in index points 9.000 18.000 18.000 Percent Change 9-0/112-500 x 100 = 8-0 18-0/225-000 x 100 = 8-0 18.0/110-000 x 100 = 16-4