The inflation rate is the increase in prices over time. It is calculated by taking the current price of something and then subtracting the original price. If the inflation rate is positive, then prices have increased over time. If the inflation rate was negative, then prices would decrease over time.
Consumer Price Index (CPI)
The CPI is a measure of inflation that is based on the average change in consumer prices across different goods and services. The CPI is calculated by dividing the total cost of goods and services purchased by consumers by the number of people purchasing those goods and services.
Real GDP measures the output of the economy. It is calculated by adding together all the products and services produced by businesses and households. Then, it divides that sum by the number of hours worked by everyone in the country.
Gross Domestic Product (GDP)
Gross Domestic Product is the total value of everything produced in a nation in a given year. It is calculated by multiplying the real GDP by the price level.
Personal Consumption Expenditures (PCE)
Personal consumption expenditures are the amount of money spent on goods and services bought by individuals. These purchases are made by both business owners and consumers.
Personal income is the total earnings of individuals before taxes and transfers. It includes wages, salaries, tips, dividends, interest, rent, royalties, etc.
Unemployment rate is the percentage of unemployed people out of the total labor force.