The Money PagesHow Do You Measure Rising Prices?
You need to check lots of prices—not just the price of one banana.
Bananas cost more this week. Does that mean everything costs more?
Not necessarily. One price can't tell the whole story.
To track inflation, people check the prices of many things over time. They look at food, bus rides, clothes, housing, and more. Inflation means prices are rising across many goods and services.
They combine those prices into a number called a price index. Things people spend more on usually count more in that number.
Families buy different things. A family that takes the bus may notice bus fares more than gas prices. So one number won't match every family's costs.
Some prices can fall even while prices rise overall.
Money words
Price index
A number that tracks how a group of prices changes over time.
Inflation means prices rise across many goods and services over time. Families buy different things, so their costs can change in different ways.
