Hi All,

Previously I have been using CPI published from the BLS (bureau of labor statistics)[0] to reflect inflation. If I'm understanding it correctly, the index we get is interpreted as "for a basket of product/service that caused $100 in year YYYY, how much would the same basket cost right now".

Recently my manager asked me if this is excluding the impact from the fact that the sparsity of a material / product may be changing. I'm guessing from the description of CPI the answer is NO.

I was wondering if there's some index that reflects Inflation Rate, but already taking the sparsity of material into consideration?

So far I have studied the Underlying Inflation Gauge published by Federal Reserve Bank of New York[1], and the Price Pressures Measure published by the Federal Reserve Bank of St. Louis[2]. However, both index uses CPI in the calculation.

I've also looked into the "University of Michigan: Inflation Expectation"[3] but this seems to be more about expectation rather than the actual historical inflation.

Any recommendations?

Thanks!

All the best,

Kathy

Reference

[0] https://www.bls.gov/news.release/cpi.htm

[1] https://www.newyorkfed.org/research/policy/underlying-inflation-gauge

[2] https://research.stlouisfed.org/publications/economic-synopses/2015/11/06/introducing-the-st-louis-fed-price-pressures-measure/

[3] https://fred.stlouisfed.org/series/MICH