This online activity shows how to use FRED, the Federal Reserve's free economic data website, to measure changes in the cost of living in your lifetime. Each month, the Bureau of Labor Statistics (BLS) collects data on prices consumers pay for tens of thousands of goods and services, everything from software to car insurance. Using rigorous statistical methods, the BLS transforms this mountain of price data into the consumer price index (CPI). The CPI is a numerical index that measures inflation by tracking monthly changes in prices urban dwellers pay for a diverse market basket of thousands of goods and services. Following simple instructions, you will locate the overall level of U.S. consumer prices as it existed on your birth date. You will then compare that level with the level today to see how prices have inflated during your lifetime. FRED's ability to create a graph with a custom index scale will allow you to visualize the rise in prices over your lifetime.
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