Consumer Price Index (CPI)

Consumer Price Index (CPI) Definition

The consumer price index is an economic indicator that measures changes in prices of typical consumer expenses. It is also used to measure inflation and the cost of living in a geographic area. For example, if living expenses rise in a particular region due to inflation, this would result in an increase in that region’s CPI. The CPI is published monthly by the Bureau of Labor Statistics in the Department of Labor.

Consumer Price Index Basket

Calculate the CPI using the prices of items in a “basket” of typical consumer goods and services. The basket includes food, transportation, shelter, clothing, medical care, entertainment, and other items. Prices are determined by samples taken from stores or providers in the relevant geographic area. Then the prices are weighted according to the item’s significance to the consumer. The core CPI is a variant of the CPI that excludes food and energy prices.

Cost of Living Index

You can also call the consumer price index the cost of living index.

Headline Inflation Definition

Also refer to the consumer price index as headline inflation.

US CPI Components

The U.S. CPI covers more than 200 categories of goods and services. The categories fall into the following 8 groupings:

1. Food and Beverages
2. Housing
3. Apparel
4. Transportation
5. Medical care
6. Recreation
7. Education and Communication
8. Other Goods and Services

If you want to learn how to price for profit, then download our Pricing for Profit Inspection Guide.

consumer price index

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consumer price index

Consumer Price Index Homepage

If you want more information about the CPI, then go to: www.blg.gov/cpi.

If you want more information about the CPI frequently asked questions, then go to: www.bls.gov/cpi/cpifaq.

US CPI Historical Data

If you want historical CPI data, then go to: ftp.bls.gov/pub.

See Also:
Economic Indicators
What is Inflation?
Supply and Demand Elasticity
The Feds Beige Book
Stagflation

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