Economic Indicators – Methods for calculating CPI and inflation

The second in a series on key economic indicators. Participants will learn about price indices and inflation. A key objective of this presentation is to provide CPAs and other business professionals, looking to improve their business acumen toolbox of skills, with a practical overview of how statistical agencies measure changes in the average price level of good and services in an economy over time. The presentation discusses simple index numbers and then progresses into a discussion of weighted price indices. Specifically, it outlines the mechanics of how the Consumer Price Index (CPI) is constructed in the U.S. and Canada, and further discusses how price indices work by illustrating how to calculate the inflation rate and how to adjust nominal data series into real series so they can be compared over time. The presentation also includes the causes and consequences of inflation and hyperinflation, and how and when the official figures are released to the public, their impact on markets.  It includes a short active learning exercise.