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• Significance: <br />Affects growth of many revenues as <br />well as expenditures; major influence <br />on labor negotiations <br />• Context: <br />CPI often used as a benchmark for <br />annual cost of living adjustments in <br />labor MOUs <br />Bay Area index higher due to housing <br />prices <br />Federal Reserve long-term inflation <br />target has been 2.0% since the 1980s <br />Average growth: 2.46% for Bay Area <br />and 2.27% for composite measure <br />ZS <br />Scenario Assumption Rationale <br />Stronger Economy 2.0% Federal Reserve's core inflation goal is 2% <br />Moderate Economy 2.5% Bay Area CPI has averaged 2.46% over the 17 <br />years since 2002 (end of Dot.com Bust) <br />Weaker Economy 3.0% Bay Area CPI has averaged 3.05% over the <br />past 6 years <br />