Understanding this pillar
What this pillar measures
The purchasing-power pillar: how much a fixed nominal dollar’s buying power has changed relative to one stated starting point.
This chart takes the BLS purchasing-power-of-the-consumer-dollar series and rebases it to August 1971. It reports cumulative percentage loss using 100 × (1 − current index ÷ baseline index). August 1971 is the comparison choice for this chart, not the original base of every CPI series.
How to read the chart
A higher loss percentage means less purchasing power relative to the baseline. This is not the current annual inflation rate. Compare two dates carefully: a change in this percentage is a percentage-point change in cumulative loss.
Illustration: a baseline index of 100 and a later value of 20 produce an 80% purchasing-power loss. The remaining buying power is 20%; restoring the original basket would require five times as many nominal dollars.
What moves this measure
Changes in the broad consumer price level affect the purchasing-power index.
The chosen starting date changes the cumulative result, even when the underlying monthly series is unchanged.
What it does not tell you
It describes a consumer-price comparison, not foreign-exchange value or a forecast for the dollar.
It holds the nominal dollar amount fixed. It does not include interest, wage changes, investment returns, or any one household’s spending mix.
When the numbers change
The source is monthly. The displayed date is the observation month. No second-by-second loss is measured, so this pillar does not run a simulated clock.
Does an 80% cumulative loss mean prices rose by 80%?
No. In that illustration, prices are five times the baseline: a 400% increase. Purchasing power and prices move inversely, so their percentage changes are not interchangeable.
Sources and methodology
Uses August 1971 as the baseline. Loss is calculated as 100 × (1 - current purchasing-power index / August 1971 purchasing-power index).