Consumer Price Index (CPI)
The Consumer Price Index (CPI) is the most widely used measure of inflation. It provides monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services.
Source: Bureau of Labor Statistics
Frequently Asked Questions
- How is the CPI used?
The CPI affects nearly all Americans because of the many ways it is used. Following are major uses:
- As an economic indicator
- As a deflator of other economic series
- As a means of adjusting dollar values
- Is the CPI a cost-of-living index?
The CPI frequently is called a cost-of-living index, but it differs in important ways from a complete cost-of-living measure. BLS has for some time used a cost-of-living framework in making practical decisions about questions that arise in constructing the CPI. A cost-of-living index is a conceptual measurement goal, however, not a straightforward alternative to the CPI. A cost-of-living index would measure changes over time in the amount that consumers need to spend to reach a certain utility level or standard of living. Both the CPI and a cost-of-living index would reflect changes in the prices of goods and services (such as food and clothing) that are directly purchased in the marketplace; but a complete cost-of-living index would go beyond this to also take into account changes in other governmental or environmental factors that affect consumers’ well-being. It is very difficult to determine the proper treatment of public goods, such as safety and education, and other broad concerns, such as health, water quality, and crime that would constitute a complete cost-of-living framework.