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Q:  How is the rate of inflation (IPD rate) calculated?

A: 

The rate of inflation is the percent change in the implicit price deflator for personal consumption as published in the Bureau of Economic Analysis' September Survey of Current Business.

However, this year the September Survey of Current Business did not include the implicit price deflator for personal consumption due to space constraints from the publication of the 2009 Comprehensive Revision statistics.  Therefore, the Department of Revenue contacted the Bureau of Economic Analysis and received the implicit price deflator for personal consumption from the 2009 Comprehensive Revision statistics.  The Bureau of Economic Analysis indicated the implicit price deflator will be published in the October Survey of Current Business.

The percentage change is calculated by dividing the July 2009 number by the July 2008 number, subtracting one, and then multiplying by 100.  These numbers were updated as part of the Bureau of Economic Analysis' 2009 Comprehensive Revision to a base year of 2005.  The values used in the calculation this year were as follows:

July 2008 - 110.205

July 2009 - 109.270

 

More information
Impact of a negative implicit price deflator (IPD) on property tax levies
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