REAL Consumer Price Index up 5.2 percent in 2012

All of the things that go into the CPI are important parts of the consumer experience, but they don't really reflect how people live day to day—most people don't buy refrigerators and cars every day, after all. That's why one group of economists has developed its own real-life index. And by this measure, prices have in recent months been growing far faster than government figures indicate.

The American Institute for Economic Research, a Massachusetts-based firm, produces a monthly Everyday Price Index, which finds that as of September, prices had grown by 5.2 percent over the course of 2012. That's far higher than the 1.9 percent seasonally adjusted increase according to CPI data.

The price index includes basics like food, gasoline, and utilities, but also includes other common expenditures like cable and satellite TV, movie and sporting event tickets, and postage. Meanwhile, it excludes big-ticket purchases like appliances and computers, as well as rent and mortgage payments. Read more >>

Seniors on Social Security squeezed by rising prices

To keep pace with the rising cost of living, the Social Security Administration announced a 1.7% benefits increase for 2013. This will give a $19 boost to the average benefit of $1,130 a month. For some of the 56.3 million people who get Social Security -- either because they are retired or disabled -- the increase may not be enough to keep up with rising expenses.

"We're grateful for any small increase [in Social Security benefits], but believe me, any small increase doesn't begin to cover the major increases we're seeing in things like vegetables, fruits, bread and milk," said Mason.

Part of the problem is a disconnect between the official inflation figure and what seniors actually pay, experts and seniors say. The inflation number used to calculate the cost of living adjustment is based on spending patterns among workers of all ages and across hundreds of items. A more accurate calculation would put more weight on the items that seniors purchase most frequently -- like food, gas and medical care, according to the American Institute for Economic Research. Read more >>

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