Now at one of the few surviving pure barbershops in San Francisco, a cut is $30. A cut at a barbershop used to cost me $15 some years ago. One factor is that the dollar loses its purchasing power, meaning it takes more dollars to buy the same thing over time. The CPI is critical because it is used for inflation-adjustment purposes across the spectrum, such as inflation-indexed Treasury securities, measures of вЂњrealвЂќ wages, cost-of-living adjustments for Social Security benefits, or measures of вЂњreal yieldsвЂќ or вЂњreal returnsвЂќ on investments or вЂњrealвЂќ GDP.Д«ut when goods and services get more expensive вЂ“ and thatвЂ™s what weвЂ™re talking about here вЂ“ there are two factors involved: Now, all this is according to official inflation figures, the Consumer Price Index, or CPI, put together by the Bureau of Labor Statistics. ThatвЂ™s the FedвЂ™s plan, as long as it happens within certain limits. During my lifetime, the dollar has lost 90% of its purchasing power. In my lifetime, there were only two such periods, from March through October 2009, and a teeny-weeny bit during the oil-bust of 2015, when energy prices collapsed. And the Fed despises these situations when workers are able to buy a little more with the fruits of their labor. There were a few brief periods when the dollar gained in purchasing power. This is the transcript from my podcast last Sunday, THE WOLF STREET REPORT:ДЇor anyone alive today, the US dollar has nearly always lost purchasing power with regards to consumer goods and services, such as food, cars, healthcare, or rent. An arcane device that impacts so much and papers over the struggles many Americans face in a world that is becoming increasingly unaffordable for them.

Hedonic quality adjustment