Day: September 2, 2025

The rate at which prices of goods and services rise over time is known as inflation. It affects both need-based expenses (like housing, food and utilities) and want-based expenses (such as clothing, entertainment and travel). Inflation reduces the purchasing power of currency and can make saving money or investing in assets less rewarding.

The main way governments, economists and business leaders track inflation is by using price indices. These track the price changes of a “basket” of goods and services that represents what most people buy. For example, the Consumer Price Index (CPI) reflects the price fluctuations of items that most people use in their daily lives, such as foods, clothing, energy and healthcare. The CPI is updated at regular intervals to reflect the changing prices of new and existing items.

Inflation can be caused by a variety of factors. For example, rising food prices can be driven by weather conditions, crop yields and international market trends. Energy prices are also volatile, influenced by geopolitical events, commodity markets and government policies. Inflation can also be accelerated by cost-push factors, where the rising costs of raw materials and wages cause manufacturing companies to increase their prices for end consumers.

Unevenly rising prices can lead to discontent among consumers, especially when they are higher than wage increases, as occurred during the COVID-19 pandemic. High inflation can also harm businesses by reducing their profit margins and eroding the value of money they hold. In addition, uncertainty about future purchasing power can deter investment and discourage savings.

Each month, the Bureau of Labor Statistics produces a series of reports about the American workforce. The unemployment rate, which tells us how many people don’t have full-time jobs or aren’t working at all, is one of the reports that receives the most attention from the media and public. However, no single number captures all of the nuances of the health of the labor market. That’s why researchers at the Bureau of Labor Statistics produce a wide range of other surveys and data that can give us a more complete picture.

The most familiar measure of joblessness is the unemployment rate, which is calculated by dividing the number of unemployed people by the total population of working-age adults. But that figure leaves out two important groups: the underemployed (people who want to work more hours but can’t find them) and discouraged workers (people who’ve given up looking for a job because they think there are none available).

High levels of unemployment reduce consumer spending, which is a crucial driver of economic growth. They also lead to a heavier burden on government resources through increased reliance on welfare programs and reduced tax revenue. Finally, they can depress the wages of those in employment and lead to social and community problems such as rising crime rates and a sense of hopelessness that can persist long after unemployment has fallen.

Each month, the Bureau of Labor Statistics interviews about 60,000 people to ask about their experiences in the job market. They collect information about a variety of characteristics, including age, race, gender, education level, job history, industry and occupation, whether they’re self-employed or on payrolls, how long they’ve been unemployed, and the reasons they’re not working.