Statistical measures of core inflation show no increase. The Consumer Price Index rose 0.4% month-over-month and 2.9% annually in December. While the leading numbers did indeed show inflation coming under control a slightly greater deal than had been expected, they left no clarity about the way ahead.



Writing for Works in Progress, economics professor Carola Conces Binder unpacked the history of the tool we use to measure inflation, the consumer price index. “The CPI and related measures affect monetary and fiscal policymaking and are often used to adjust Social Security payments, income tax brackets, and wages for millions of workers,” she wrote. “Because of these far-reaching impacts, even relatively small changes in the measurement of the CPI can have major implications for households, firms, and the government’s budget. Thus, the technocratic task of measuring the price level is often at the center of political controversies. The evolution of inflation measurement in the United States has reflected both technical progress and these political forces.”