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Pizza, laptops, cars . . . all count for inflation

Workers track down prices for the CPI, which rose a whopping 1.1% in June.

July 17, 2008|Utku Cakirozer | Times Staff Writer

Kim Gomory treks more than 850 miles each month, stopping by more than 120 grocers, gas stations, restaurants, stores, health clubs and other businesses.

But Gomory, a Honda Civic hybrid owner in her 40s, isn't a soccer mom drawing a bead on bargains. Trace a line from her calculating consumerism in Claremont, Walnut and other communities and you'll see how national economic policy gets made.

Shielding a tablet computer with skill worthy of a CIA operative, Gomory is among 400 Bureau of Labor Statistics staffers, including about 13 in the Los Angeles area, who compile data used to calculate the consumer price index, the best-known gauge of U.S. inflation.

The latest survey, released Wednesday, calculated that the consumer price index rose 1.1% in June -- the second-largest increase since 1982 -- and jumped 5% compared with June 2007. Prices in Los Angeles, Orange and Riverside counties rose 1.1% in June and 5.4% compared with a year earlier.

To the consternation of critics who say the index fails to reflect Americans' struggles to make ends meet, the CPI is holy writ for bankers, economists, policymakers and politicians as they set mortgage and credit card interest rates, wages and government benefits programs such as food stamps and Social Security.

Before such macro decisions are made, however, it is the micro, meticulous labor of staffers such as Gomory that matters.


National market basket

Quietly, with extreme discretion, she helps fashion a national market basket, figuring what shoppers pay for a variety of goods and services. Gomory spends 10 minutes to an hour at each location, talking to folks, scrutinizing prices and taking down information while attracting as little attention as possible.

"Anything that consumers spend pennies on is eligible for pricing" as part of the 80,000 items her agency tracks to compute the CPI, said Gomory, who earned a liberal arts degree at the University of La Verne and has taken economics courses at several local universities.

Gomory spoke as she made her rounds recently at more than a dozen spots, including a health club, a dry cleaner and a camera store. In exchange for seeing how the "economic assistant" does her work, a Los Angeles Times reporter and photographer agreed not to identify the enterprises that participate voluntarily. This information is so closely held that Gomory doesn't even disclose it to her family.

"Neither my husband nor my children or my friends know the locations I visit for CPI data, because to keep our respondents' confidentiality is the most important thing," said Gomory, who carefully locks documents in her car trunk and palms her purple bureau credentials to hide her identity. "People can be fired from BLS if the agreement is breached."

In Claremont, Gomory breezed into a cavernous health club where a receptionist greeted her as a regular and announced her to a boss just as a visitor from "the Bureau."

Gomory checked the single member initiation fee, charges for a new family membership and monthly costs for seniors. All were unchanged from a month earlier.

Consistency counts in this nationwide tally, as she shows when she pops into a popular La Mirada restaurant.

There, her bosses in Washington, D.C., have told her, she must price a "cinnamon roll combo" with two eggs and two slices of bacon. Even if the shop owner says the dish hasn't changed, "it is my duty to verify that there is no change. And then I look at the price: same. $5.99."

She repeats the exercise for the biscuits-and-gravy plate and the children's cheese pizza; all were unchanged. Most products are so easy to price that Gomory often doesn't even talk with owners.

But computers and cars? Complicated. Detailed. Time-consuming.

The Bureau of Labor Statistics, part of the Labor Department, updates its survey twice a year to keep up with technology; it does an annual revision on cars. This means, for example, that Gomory must check 40 specifications for a laptop to ensure it was the same computer that she priced at a local store the previous month.


Auto parts, repairs

At a Walnut car repair shop, where the checklist is lengthy, she was careful to show up at a convenient time to consult with its owner, Jose "Pepe" Rosenfeld, 62. "She knows how busy we are," the car repairman said, "so she often comes on the lunch breaks."

Gomory prices 20 parts or repairs. She dumped data into her computer, stopping suddenly as she punched in the $771.51 cost of an air conditioner compressor.

"Hey wait a minute! Wasn't it $823 last month?" she asked Rosenfeld.

"The distributor lowered it," he said. "Probably, they have a big stock and want to sell it. It is good for the customers, though."

"Of course, anything that goes down in price is good," said Gomory, who later asked why another part had gone up from $193.75 to $209.97.

"Simple," Rosenfeld said, "they increased the price."

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