QWe have seen rising prices at the grocery store for some time. This also is happening at the hardware store, restaurants, gas pumps and other shopping places. What is the inflation number on the items not on the federal inflation index?

DALE, GOLDEN VALLEY

AConsumer price inflation has run at a 2 percent rate over the past 12 months ending in September. That's pretty much in line with the Federal Reserve goal for consumer price inflation and it has been the underlying rate of consumer inflation in recent years.

Inflation is a measured rise or increase in the overall price level. The main inflation measure by the U.S. Bureau of Labor Statistics (BLS) is the Consumer Price Index for All Urban Consumers (CPI-U). It aims to capture the spending habits of about 88 percent of the population. Gasoline and energy have driven recent increases in the CPI. In the latest data, the energy index is up 2.3 percent and the food index 1.6 percent over 12 months. Gasoline over that period jumped 6.8 percent, and beef and veal 5.4 percent. But pork is down 2.7 percent and used cars 1.6 percent. Tools, hardware and supplies are up 0.4 percent, and the category "food away from home" gained 2.8 percent. Televisions are down 18.2 percent. Dishes and flatware declined by 9.3 percent. And so on.

The CPI is an average, with lots of prices going up and others down. One reason many people believe inflation is running higher than the published number is that their spending differs from the average. My youngest child is a junior in college. When I write that check I'm well aware that my personal price experience of inflation is much higher than 2 percent. Older people also face higher inflation rates. The government's experimental inflation index for the elderly (CPI-E) covers households 62 years of age or older. Since 1982, the elderly CPI rose at an annual average rate of 3.1 percent, compared with 2.9 percent for the regular CPI. The difference largely reflects the costs of medical care and shelter.

The main reason inflation seems higher than reflected in government statistics is that so many people have lost jobs, taken pay cuts or haven't had wage increases for years. We're trying to maintain our standard of living on a shrunken income.

Even though the overall rate of inflation is tame right now, long-term investors still should worry about increases eroding the value of their savings over time. My favorite investment that is designed to protect savings from the ravages of inflation is the U.S. government's I-bond, a savings bond. You can buy I-bonds online at Treasurydirect.gov. You won't pay a commission. Your I-bond investment compounds tax sheltered until redeemed. It's backed by the full faith and credit of the federal government. The bottom line: It's a simple, low-cost, practical investment that prevents inflation -- as measured by the consumer price index -- eroding the value of your savings.

Chris Farrell is economics editor for "Marketplace Money." His e-mail is cfarrell@mpr.org.