Welcome to Money for the Rest of Us. This is a personal financial show on money.

How it works, how to invest it, and how to live without worrying about it.

I'm your host, David Stein, today at Episode 378.

It's titled, Is Stagflation Coming?

Later this week, US Bureau of Labor Statistics will release the latest inflation numbers for the US.

Inflation measures the rise in prices over time.

Inflation is caused by an increase in the money supply, the amount of dollars and other fiat currencies outstanding.

And it's a function of demand to use those dollars to buy goods and services.

Historically, most of the money supply increase comes from new bank lending,

as banks issue new loans that process leads to money creation.

Money is also created through central bank asset purchase program,

sometimes called quantitative easing, in which a central bank will buy outstanding bonds.

And if that happens in combination with the federal government running a deficit,

that actually also leads to more money flowing into the economy.

Government statisticians measure inflation by calculating how much the price of items

that are included in a reference basket of goods and services changes from one period to the next.

They conduct surveys, they go to stores and see what prices are listed at for various products.

In the US, there are over 200 categories of goods and services used to calculate the consumer price index.

Those goods and services are divided into eight major groups.

Food and beverages, housing, apparel, transportation, medical care, recreation, education and communication.

In the February release, about a month ago, the US consumer price index for all urban consumers,

known as CPI-US, was 0.6% for the monthly change.

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