ome, wages, and interest rates to get inflation-adjusted measurements of these concepts.The Department of Labor's Bureau of Labor Statistics compiles prices for items sold to consumers in "urban" areas which makes up about 80% of the population. Then the prices collected by the BLS are converted into 364 separate indices for everything from sneakers to gasoline. The various components are combined into an index of all items.The overall index is weighted to reflect the buying habits of consumers with the components for housing, food, and transportation receiving more distinction than other components. The result is an index number that reflects what it would cost to buy the market basket of goods for that month. Economists use the changes in CPI to measure inflation. If they need to check short-term inflation, they compare the most recent month's index with the previous month's figure. For a look at long-term inflation, they may check the most recent month's index with the index for the same month in the previous year.The CPI is used in about of all union contracts to automatically adjust wages to compensate for inflation, and is used by many non-union employers for the same objective. It is also used to adjust Social Security and other benefits to keep up with inflation.*******************************************************DURABLE GOODS ORDERS AND SHIPMENTSDurable goods orders measure the demand for durable goods, which are intended to last three or more years, such as cars, furniture and household appliances. Durable goods indicate future production in manufacturing, which is the largest contributor to industrial production. The Bureau of Census releases the monthly estimates of durable goods orders and shipments for the preceding month with monthly modifications.Orders are a near-term indication of investment and consumption plans. Shipments indicate actual investment and consumer durable purchases by wholesalers and retailers. Due ...
