Consumer Price Index (CPI) Rises in the U.S. April 2021

The Bureau of Labor Statics (BLS) recently released April's Consumer Price Index (CPI) numbers that point to increasing inflation. While CIP rose 3.2% over the year the auto industry rose 10% in April. A rising CPI means we will pay more for products and services (specifically imported goods). It can also impact our cost of living and how much we pay for loans, credit cards, mortgages, etc... Furthermore, sometimes inflation can impact exchange rates and in turn influence import and export flow. (I'm not an expert in this area but like to sort of understand how the market is impacted and influenced by changes in the economy and policy.)

In case your curious this is how you calculate CPI. You can learn more HERE.

CPI= Cost of Market Basket in Base Year / Cost of Market Basket in Given Year ×100

You can take a look the BLS inflation calculator HERE and see that $1 in April 2020 is $1.56 meaning your money is worth less (That really isn't the whole story because any number of things can happen in the digital world.) Apparently, inflation can depreciate the U.S. dollar and adjust the currency exchange rate in a way that makes U.S. products cheaper. I think the U.S. has struggled to find ways to counter deflated Yen that makes Chinese exports cheaper (HERE)? 🤷 

What Happened?

In April, the Consumer Price Index for All Urban Consumers rose 0.8 percent on a seasonally adjusted basis; rising 4.2 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy increased 0.9 percent in April (SA); up 3.0 percent over the year (NSA).

What is CPI?

The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods and services. The CPI reflects spending patterns for each of two population groups: all urban consumers and urban wage earners and clerical workers. The all urban consumer group represents about 93 percent of the total U.S. population. You can get into the details of the definitions HERE.

You can gain additional information on CPI for Michigan HERE.

CPI April 2021 by Dr. Murad Abel on Scribd