Question

What is the CPI? What is the Core CPI? What does inflation mean? What does deflation mean? Does the most recent CPI indicate that the US is experiencing inflation or deflation? Why? Please explain your reasons. How much have gas prices increased or decreased from last year? How much have food prices increased or decreased from last year? What do you think are the reasons for these changes in prices? Do you feel that the current CPI and/or Core CPI indicate a threat to economic stability? Why or why not? Please analyze and explain in detail

Answer 1

CPI is Consumer Price Index

Core CPI = CPI - Energy and Food Prices

Inflation means increase in the price of goods and services over time

Deflation means decrease in the price level in the economy

There is very mild level of inflation in USA (~1.7%) as published by US Labor Department.

Gas price has decreased over the last 1 year. During Sep 2018, it was $2.9, now it is $2.6. This is directly correlated to the global demand and supply of crude prices.

Food price has increased ~1.7% over the last 1 year. This is due to increased shipping costs, Climate change, More demand of certain food drives up price, etc.

We don't foresee any threat to economic stability basis the CPI data. US is experiencing very mild inflation.