what s the best measure of inflation 
in the u s the consumer price index cpi which is produced by the bureau of labor statistics bls is the most widely used measure of inflation it influences government policy and the cost of borrowing money however like other measures it isn t perfect and won t reflect changing living costs for all the bottom lineinflation is part of life costs rise and erode among other things the value of investments if your investment rose 12 in a given year but the cost of living went up 4 then your actual return isn t going to be 12 that s why many investors look at the inflation adjusted return this measure takes the nominal return and deducts inflation to reveal the real return of an investment the inflation adjusted return allows us to see the true earning potential of a security without external economic forces and it can also be particularly useful when comparing investments between different countries each of which will likely have different levels of inflation 