Master 6 Key Inflation Statistics

How do you construct an inflation-sensitive portfolio?

Whether you’re saving for retirement, education, a dream home or launching a business, you can't afford to lose ground to the erosive effects of inflation.

The first step is understanding how inflation is measured.

A variety of statistics and economic indicators help investors track and understand inflation. The acronyms have become part of our financial language. What does each acronym mean? Which ones matter?

1. CPI: Consumer Price Index

Also known as “headline” CPI, this is the most widely used inflation index. It measures the overall change in prices for a representative basket of goods and services based on 80,000 prices collected monthly, including food and energy.  You will hear this number quoted in business news each month on the morning it's released. CPI readings have been known to move financial markets. 

Published by the Bureau of Labor Statistics (BLS), a division of the U.S. Department of Labor.

2. Core CPI: Core Consumer Price Index, excluding Food & Energy

Excludes the volatile food and energy components of the CPI to provide a more stable inflation measure.

Also published by the BLS.

3. CPI-U: Urban Consumer CPI

A version of CPI selected by the US Treasury to calculate the inflation adjustment for TIPS: non-seasonally adjusted U.S. City Average All Items Consumer Price Index for All Urban Consumers.

Also published by the BLS.

4. PPI: Producer Price Index

Measures changes in wholesale prices, reflecting cost pressures for manufacturers and producers.

Also published by the BLS.

5. PCE: Personal Consumption Expenditures Price Index

Measures spending on goods and services in the U.S. The PCE captures changes in prices as well as consumer behavior. A preferred inflation measure for the Federal Reserve.

Published by the Bureau of Economic Analysis (BEA), a division of the U.S. Department of Commerce.

6. GDP Deflator: Gross Domestic Product Price Deflator

Measures the average change in the prices of all goods and services produced in the U.S. Includes exports but not imports. Used by some firms to adjust contract payments.

Also published by the BEA.

While each indicator offers important insights into where price levels are, the three most often cited are CPI, PPI and PCE.

Build an Inflation-Sensitive Portfolio with ETFs

Understanding inflation is a fine place to start; building a portfolio with inflation-sensitive investments is your next step. Fortunately, the universe of user-friendly, tax-efficient and low-cost ETFs offers a wide variety of choices for inflation-sensitive investors.

30212  AXS Schedule a Consultation Promotional Email Campaign v1 (4)-1

1. “Consumer Price Index Frequently Asked Questions” U.S. Bureau of Labor Statistics, retrieved August 3, 2023.

This information is educational in nature and does not constitute investment advice. These views are subject to change at any time based on market and other conditions and no forecasts can be guaranteed. These views may not be relied upon as investment advice or as an indication of any investment or trading intent. This content should not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by AXS Investments or any third-party. All investing is subject to risk, including the possible loss of the money you invest.

ETFs involve risk including possible loss of principal. Diversification is a strategy designed to manage risk. It cannot ensure a profit or protect against loss in a declining market.

Distributed by ALPS Distributors, Inc, which is not affiliated with AXS Investments. AXI000315

John Davi

Author: John Davi

Portfolio Manager, AXS Astoria Inflation Sensitive ETF (PPI) Mr. Davi is the CEO, CIO and Founder of Astoria Portfolio Advisors, a leading investment management firm and ETF Strategist, specializing in research driven, multi-asset ETF and thematic equity portfolio construction. He is an award-winning research strategist and has over 20 years of experience as an ETF industry leader and innovator.

Related posts from blog

Check out our related posts based on your search that you may like

January 10 2024
2 Min Read

By the time inflation reemerged from a three-decade hibernation, Astoria Portfolio Advisors and CEO ...

December 19 2023
2 Min Read

Today we face a challenge that lay dormant for years. Inflation rose rapidly in 2021 driven by pande...

December 12 2023
2 Min Read

Inflation has been a top financial headline for a while due to its pervasive impact on consumers, bu...