Truflation Index Calculation
Remastering the CPI.
The US Truflation index deconstructs the CPI’s basket of goods categories and subcategories to reflect actual spending better. It also substitutes current data with carefully selected data sets gathered by our team or obtained from our partners at Penn State University (see Data Sources).
Truflation keeps the fundamental premise of the YoY CPI as the measurement of the percentage price change of goods and services between two consecutive years (year-over-year CPI).
CPI1 - the cost of the basket of goods at the year n+1
CPI0 - the cost of the basket of goods at the year n
The price of the basket is calculated as a weighted average of the product and services prices.
Unlike the CPI, the Truflation Index:
- measures the daily changes in inflation changes
- changes the subcategories within categories of goods and services
- substitutes core data of categories and subcategories with daily price updates
- uses monthly rather than yearly categories proportions in the basket (reported by chained-CPI and not the standard CPI) (see Categories Proportions)
- since June 8, 2022 uses independent data weights based on vast consumer expenditures from 2021 census, mini census and high quality consumer and merchants surveys