A professional shopper looks for inflation

Inflation's shopper

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NEW YORK (CNN) -- Janet Edwards, a professional shopper for the U.S. Government, strolls the supermarket produce aisle, blending in with "civilian shoppers."

"Are these the only avocados you have?" she questions the produce manager, as she carefully records the price on a handheld computer tablet.

None of this price checking is for her personal pantry. Rather, Edwards is researching for the Labor Department's Bureau of Labor Statistics (BLS), which compiles the Consumer Price Index each month.

"Washington keeps a record of these prices and that is actually how the Consumer Price Index is actually devised," said Edwards.

The CPI measures the change in a hypothetical shopping cart, which includes what a typical family might spend money on each month - everything from a gallon of gas and a box of cereal to rent and doctors' visits. To make the hypothetical cart useful, the BLS has surveyed thousands of families on their actual spending habits.

Then the shoppers get to work. Edwards and about 400 other CPI shoppers around the country price more than 80,000 goods and services every month. The Bureau of Labor Statistics crunches the numbers to create the CPI.

For workers, the CPI is just a benchmark, giving you an idea of whether your paycheck is keeping up with the times. For retirees, the CPI actually means dollars and cents - it's what determines how much Social Security checks go up each year.

The bureau's shoppers face a host of challenges.

That box of macaroni and cheese might still be $2.99 - suggesting no inflation - but just 12 ounces instead of 14. "The challenge with food is weight volume because that's where manufacturers generally have price increases for the consumer," said Edwards.

Clothing is even more problematic since the same item often does not remain on the rack for more than a month or two. So shoppers for the BLS have a strict list of criteria to assist them in finding the best match for a garment priced last month.

Edwards examines a men's suit in the apparel department of a discount department store (exactly which store and which brand we're not permitted to reveal).

"It's 100% wool," said Edwards. "It has a back vent, all specific details which help us to describe this unique item. If I cannot find this exact same suit with the exact brand I have a hierarchy of importance that I must follow, and I can, in certain times of the year, substitute and find another item."

At an electronics store she questions the clerk about the precise cost of a cell phone.

"$249.99, exact?"

"Yeah, exact."

"I need to have it down to the exact penny and that's just your regular selling price?"

Some economists say the CPI is failing to fully capture the pinch Americans are feeling. During the month of February, the latest on record, prices were unchanged according to the CPI, and on an annual basis the CPI showed inflation rising at a rate of 4%.

"Technically it's very accurate, but I think for me and you it doesn't really tell us what we feel out there," said Allen Sinai, chief global economist of Decision Economics. "We're paying a lot for a lot of things and the CPI doesn't tell us that."

The reason, said Global Insight's chief economist Nigel Gault, is that inflation for our daily needs such as gas and groceries is steeper than for infrequent purchases like computers and cars.

"The things going up most rapidly in price are the things people purchase frequently," said Gault. "It's completely obvious to people."

That the CPI is seasonally adjusted also can make the inflation appear tamer than what Americans are truly experiencing. Gasoline, for example, normally rises during springtime, a fact that seasonal adjustments take into account, by moderating the absolute hike in pump prices for an individual month.

"You're looking at big increases potentially for gas, but the seasonal factors will mitigate that," said Pat Jackson, Bureau of Labor Statistics economist. "This is one of the reasons people are skeptical."

Even with doubts about the final product, Edwards said she takes great pride because the CPI influences so many Americans.

"It's highly respected and used by the vast majority of public and government agencies and it benefits the consumers in more ways than the average consumer would even know," said Edwards, citing Social Security benefits, school lunch programs and collective labor bargaining as examples of the influence that the CPI has on the daily lives of millions of Americans.