STEVE INSKEEP, host:
Also critical to American well-being is the way that economists in Washington calculate the rate of inflation. To do this, they compile a measure called the CPI, or Consumer Price Index. The CPI matters because so many things are tied to it. Salaries, interest rates on loans, how big your Social Security check will be - all tied to this number.�
Coming up with a CPI requires hundreds of government workers who go around the country and collect thousands of prices each month. Caitlin Kenney, from our Planet Money team, caught up with one of them.�
CAITLIN KENNEY: The CPI number starts with people like this guy.
Mr. GEORGE MINICHIELLO (U.S. Department of Labor): Im George Minichiello. Im an economic assistant with the Bureau of Labor Statistics of the U.S. Department of Labor.
KENNEY: Every work day, George gets up and goes to different stores and businesses with one basic question: How much does stuff cost? He prices fishsticks, dental fillings, Caribbean cruises, even stuff he himself would never buy.
Mr. MINICHIELLO: I've learned how to describe ladies' dresses - you know, handkerchief hem, or I've learned what ruffles are and ribbons and lace. So I probably know too much about ladies' clothing.
(Soundbite of laughter)
KENNEY: George and the army of other economic assistants have a list of things to shop for, prepared by their bosses at the Bureau of Labor Statistics. The list represents the purchases made by a typical U.S. household. Its called the market basket. And the items in it are very specific. For example, today, George is looking for lettuce at a small supermarket in Brooklyn, New York.
(Soundbite of beeping scanner)
Mr. MINICHIELLO: A multipack of romaine lettuce - not certified organic - from California. Now, we're going to get the price.
(Soundbite of beeping scanner)
Unidentified Woman: Two ninety-nine.
Mr. MINICHIELLO: Two ninety-nine. Thank you. So 2.99 is the same price. Oh, wait, we have a change here. It's the same price. However, the weight is different. So effectively, that's a price decrease.
KENNEY: So we're seeing deflation right here?
Mr. MINICHIELLO: We're seeing a reduction in the price. Yes.
KENNEY: The drop in the price of that lettuce was 27 percent, which may sound scary. It could sound like deflation, an overall decrease in prices, which is a bad thing. But George says, relax. Food doesnt really tell you that much about the overall economy. The price of food always goes up and down. For example, right now, corn and wheat prices are shooting up. That's why most experts focus on what they call core CPI, where they cut out food and energy prices that tend to go up and down in huge swings.
(Soundbite of door closing)
KENNEY: The next item on Georges list is a shirt, so we head to a clothing store in another part of Brooklyn. But again, we're not just looking for any shirt.
Mr. MINICHIELLO: I'm looking for the fabric content - 97 percent cotton and 3 percent Lastol. It's a long-sleeve shirt; it's a full-button front.
KENNEY: George has to be so specific because he needs to make sure the items he prices this month are exactly the same as the items he priced last month. That's the only way to tell if prices are going up or down.
As we're talking, the owner of the store approaches.
Unidentified Man #1: Hi, nice to meet you.
KENNEY: Now, I'm not allowed to identify him or reveal the name of his store. The Bureau of Labor Statistics is very secretive about the data it gathers because this information could move markets. But I ask the store owner how he feels about being part of the CPI, a number that impacts so many people's lives.
Unidentified Man #2: I guess you're in awe a little bit. You cant believe that you have an effect on the statistics that people see.
KENNEY: The prices we recorded on this trip - for lettuce and a boys shirt - and the other things we price - fishsticks, canned sardines and mustard sauce, and multigrain bread - will be part of the next CPI release, which comes out on Wednesday.
Caitlin Kenney, NPR News.
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