Consumer Prince Index (CPI) Defined
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 8 groupings:
1. Food and Beverages
5. Medical care
7. Education and Communication
8. Other Goods and Services
To learn how to price for profit, download our Pricing for Profit Inspection Guide.
Access your Strategic Pricing Model Execution Plan in SCFO Lab. The step-by-step plan to set your prices to maximize profits.
Click here to access your Execution Plan. Not a Lab Member?
Click here to learn more about SCFO Labs
Consumer Price Index Homepage For more information about the CPI, go to: www.blg.gov/cpi
For more information about the CPI frequently asked questions, go to: www.bls.gov/cpi/cpifaq
US CPI Historical Data For historical CPI data, go to: ftp.bls.gov/pub