The latest episode of the NPR radio show and podcast Planet Money is a rerun of one of my favourites: how inflation gets determined.
Caitlin Kenney follows around one of the government’s economic assistants, George Minichiello, who spends his days going to stores pricing goods. He’s one of 450 economic assistants nationwide, according to the show.
His notes on the prices of everything from lettuce to toys to very specific sizes and types of clothing become part of the Consumer Price Index, otherwise known as the monthly inflation number.
This episode is so great because it’s all at once mundane, precise, and shrouded in mystery. Near the beginning, Kenney says that the Bureau of Labour Statistics, which compiles CPI, made her sign a non-disclosure form. She couldn’t name the stores they went to, the names of the store owners, any of the brand names Minichiello looked at, or even the colour of the employee’s uniforms.
The idea is that the BLS doesn’t want anyone to be able to get to the official inflation number before they release it, hence all the secrecy.
But at the same time it’s such an ordinary thing to walk into a store and see how much the lettuce costs. And that’s what this huge, important economic indicator comes down to, says Adam Davidson near the end: “a guy named George driving around Bensonhurt, Brooklyn, to figure out how much a boy’s shirt costs.”