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How do you figure out inflation rate?

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The rate of inflation is generally calculated by changes in the CPI (Consumer Price Index) over time. The CPI is a collection of the prices of a set of goods that have been determined to be good indicators of the overall pricing of the economy.

In the United States, the Bureau of Labor Statistics compiles the numbers for the CPI monthly and maintains a page with current details on the CPI. They even provide an inflation calculator which helps you use the CPI to compute the total rate of inflation between any two years.

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