New inflation numbers
In an effort to make the government's Consumer Price Index more accurate, the Bureau of Labor Statistics may begin calculating the figure out to three decimal places. Hillary Wicai explains why.
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SCOTT JAGOW: We'll find how much we're paying for things this morning. It's called the Consumer price index. But as Hillary Wicai reports, it doesn't always reflect the inflation reality.
HILLARY WICAI: It turns out that using a price index rounded to just one decimal place produces an inaccurate inflation reading almost one quarter of the time.
So the Bureau of Labor Statistics may start publishing the index values to three decimal places.
Patrick Jackman is a CPI economist with the Bureau of Labor Statistics.
PATRICK JACKMAN: "That would reduce the probability of mis-rounding from 25% to essentially a quarter of one percent. And we feel that this information would be useful for the markets and for policy makers."Wall Street has been worried about reports of core CPI rising in each of the past four months by .3 percent.
But .3 might have looked less worrisome if it had really been .251 for example.
In Washington, I'm Hillary Wicai for Marketplace.
