Inflation Definitions

With all of the talk about recession, inflation, CPI and PPI it might be a good opportunity to define the terms. Beware these are government speak.

Recession, as defined by the National Bureau of Economic Research (NBER), is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Inflation, as defined by the Bureau of Labor Statistics (BLS), is the overall general upward price movement of goods and services in an economy. BLS has various indexes that measure different aspects of inflation:

The Consumer Price Indexes (CPI), as defined by the BLS, measures inflation as experienced by consumers in their day-to-day living expenses. (It is sometimes referred to as the retail price index.)

The Producer Price Index (PPI) , as defined by the BLS, are a family of indexes that measure changes in the selling prices received by domestic producers of goods and services.