Price Of Lettuce
Every month a new consumer price index (CPI) comes out and tells us whether prices have gone up or down and whether we are going through inflation or deflation. The CPI controls everything from social security, school lunches, to bonds, everything is affected by the CPI. One question I had that i found the answer to from listening to the podcast was where did this number come from? I found out that there are 450 people that collect the CPI number and those people call themselves economic assistance's. Basically their job is to walk into a store and look at the price of things and compare the price of the item to what the price of it was last month.
George Minichiello who works with the consumer price index is a guy who goes into stores and sees whether the price of certain products have gone up or stayed the same or have decreased. I thought that this job was actually kind of cool because you have to be very discrete about the job and cant tell anyone what you do. George was a very unassuming guy and didn't drive a fancy car and couldn't say much about what he did. The first stop that they went to was a grocery store which George has been going to once a month for three years. They were at the grocery store to find out the price of lettuce which had to be a specific lettuce. They had to look for a bag of romaine hearts of lettuce which was priced at $2.99. The price of the lettuce stayed the same but the weight of the lettuce has changed. What they saw here with the lettuce was a little bit of deflation and there was a 27% mass drop. But with food its different and you see lots of fluctuation in price.
There are two types of CPI there is the headline CPI which includes basically everything and then there is the core CPI which includes food, oil and that number is usually the stable number. The next stop they went to happened to be the core CPI. They had went to a clothing store and needed to find a collared shirt for a young boy. George said it was a lot harder to price ladies clothes because there are more things that we have to look for when pricing everything. The CPI needs to know what Americans are paying for what they are buying and what they are buying. The price of the shirt was $25.00 which was the same price as last months. After listening to this podcast it really made me think about how many people are out there looking for CPI numbers and we don't even know it.
