In early October, staff at the Bureau of Labor Statistics (BLS)—like thousands of other federal workers—were furloughed because of the government shutdown. Some BLS staff were recalled about a week later to finalize the monthly inflation report for September, which was originally scheduled for release on October 15.

The move underscores how reliable inflation data are critical to the functioning of the US economy and ultimately affect daily household decisions. Ensuring federal data and statistical agencies remain open, independent, and objective is essential to economic growth and prosperity.

Four ways inflation numbers can affect families in the US

1. Interest rates. Like central banks around the world, the Federal Reserve carefully tracks inflation to set benchmark interest rates. These directly affect the interest rates banks offer on savings accounts, mortgages, and business loans.

   Federal benchmarks also influence how businesses invest and plan for the future. That means higher prices and higher interest rates can filter down to consumers who shop at those businesses.

2. Social Security cost-of-living adjustments (COLAs). Annual changes in Social Security benefits are tied to the BLS’s Consumer Price Index for Urban Wage Earners and Clerical Workers. Changes or mismeasurements in the index directly affect Social Security benefits for millions of beneficiaries and the overall finances of the Social Security trust fund.

   In 2026, the COLA adjustment will increase benefits for 75 million Social Security recipients by 2.8 percent, raising the average benefit for retired workers by $56 per month or $672 per year. According to former BLS Commissioner Erica Groshen, a 0.1 percentage point error in the BLS’s reported inflation rate could reduce or increase total payments by about $1 billion annually.

3. Tax brackets and tax benefits. Each year the Internal Revenue Service (IRS) adjusts income tax brackets for inflation. This helps prevent what is known as “bracket creep,” or when inflation pushes a taxpayer into a higher income tax bracket. Bracket creep can result in people paying more in taxes, even as their overall purchasing power remains the same.

   Imagine a simple tax system with just two income tax brackets: a 10 percent bracket for people who earn under $50,000 and a 20 percent bracket for people who earn over $50,000.

   Let’s say a worker making $50,000 receives a $2,000 raise to keep pace with inflation, increasing their earnings to $52,000. If the tax bracket cutoff also increases with inflation to $52,000, the worker’s tax bill would be $5,200 (10 percent of $52,000). However, if the tax bracket was not adjusted for inflation, the worker would see a tax bill of $5,400 (10 percent of the first $50,000 plus 20 percent of the additional $2,000 raise). As a result, the worker would end up owing an additional $200 on their taxes, despite not earning more in real dollars.

   In addition to tax brackets, the IRS adjusts some tax credits and deductions for inflation to ensure their value doesn’t erode. Adjustments to provisions like the earned income tax credit and the refundable portion of the child tax credit help ensure these benefits don’t lose value over time.

   Though the IRS has already published inflation-adjusted brackets and provisions for 2026, the IRS could fail to properly adjust tax brackets and inadvertently subject US taxpayers to bracket creep in coming years without accurate or reliable inflation data from the BLS.

4. Bond markets. The US Department of the Treasury issues bonds that are protected from inflation, called Treasury Inflation-Protected Securities (TIPS). TIPS’s principals are adjusted based on changes in the BLS’s Consumer Price Index, so returns keep pace with inflation. In other words, as rates of inflation rates change, so does the amount of principal investors have to pay to purchase the bonds and their rate of return.

   Further, if investors lose confidence in the accuracy of BLS’s inflation data, they could demand higher yields to compensate for perceived risks, which would increase the government’s borrowing costs.

BLS collects critical information on the prices of everyday goods and services

Each month, the BLS collects nearly 90,000 price quotes from around 6,000 households, who report how much they pay for various goods and services. It also gathers pricing data from 22,000 retail establishments, including department stores, supermarkets, and hospitals. The BLS then analyzes, weights, and reports these data to show how prices for goods and services purchased by typical urban households are changing.

Inflation data on specific categories of goods and services can shape families’ purchasing and investment decisions. If, for example, prices for new cars are unchanged but the cost of used cars has gone up, this could influence which kind of car a family chooses to purchase and when.

Recent pricing data show that between August 2024 and August 2025, prices overall rose by 2.9 percent, but prices for some goods changed more than others. Gasoline prices fell by 6.6 percent over the same period, while prices of used cars and trucks rose by 6.0 percent.

These small monthly price adjustments can cumulate into steep changes. Over the past 20 years, gasoline prices increased by 85 percent—meaning that a gallon of gas is almost twice as expensive today as it was in 2004.