Browse Definitions :
Definition

Consumer Price Index (CPI)

The Consumer Price Index (CPI) is a measure of the weighted average change in price that urban households in the United States pay for a sample basket of consumer goods and services. Goods and services represented in the CPI can be broken into eight major groups: food and beverages, housing, transportation, medical care, recreation, education and communication and "other."  Each month, the U.S. Bureau of Labor Statistics (BLS) calculates the index by averaging price changes for each item in the basket. 

The CPI is designed to reflect the purchasing patterns for "all urban consumers" as well as urban wage earners and clerical workers, according to BLS documents. The urban consumer group represents approximately 89 percent of the total U.S. population and includes professionals, the self-employed, the poor, the unemployed and retired citizens. The CPI does not include the spending patterns of people living in rural nonmetropolitan areas, farm families, people in the Armed Forces, and those in institutions, such as prisons and mental hospitals.

The CPI is one of the most frequently used indictors by economists, government officials, business analysts and others for identifying trends in U.S. inflation or deflation. The U.S. president, Congress and Federal Reserve often set their fiscal policies based on data from the CPI and other indexes, including the Producer Price Index (PPI), a measure of the average change in prices that domestic producers of goods receive for their products.

The CPI is frequently used to adjust charges for rents, as well as wages, alimony, child support and other factors that changes in the cost of living might affect. However, the CPI does not take into account some factors that affect cost-of-living and consumer well-being, including health, water quality and safety.

The BLS breaks the CPI into four major census regions (Northeast, Midwest, South and West) and three metropolitan areas (Chicago-Gary-Kenosha, Los Angeles-Riverside-Orange County and New York-Northern New Jersey-Long Island. The bureau provides further details on 11 additional metro areas every other month and an additional 13 metro areas twice a year.

This was last updated in August 2017

Continue Reading About Consumer Price Index (CPI)

Join the conversation

1 comment

Send me notifications when other members comment.

Please create a username to comment.

What metrics do you think work well to gauge inflation?
Cancel

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

  • PCI DSS (Payment Card Industry Data Security Standard)

    The Payment Card Industry Data Security Standard (PCI DSS) is a widely accepted set of policies and procedures intended to ...

  • risk management

    Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings.

  • compliance framework

    A compliance framework is a structured set of guidelines that details an organization's processes for maintaining accordance with...

SearchSecurity

  • Trojan horse (computing)

    In computing, a Trojan horse is a program downloaded and installed on a computer that appears harmless, but is, in fact, ...

  • identity theft

    Identity theft, also known as identity fraud, is a crime in which an imposter obtains key pieces of personally identifiable ...

  • DNS over HTTPS (DoH)

    DNS over HTTPS (DoH) is a relatively new protocol that encrypts domain name system traffic by passing DNS queries through a ...

SearchHealthIT

  • telemedicine (telehealth)

    Telemedicine is the remote delivery of healthcare services, such as health assessments or consultations, over the ...

  • Project Nightingale

    Project Nightingale is a controversial partnership between Google and Ascension, the second largest health system in the United ...

  • medical practice management (MPM) software

    Medical practice management (MPM) software is a collection of computerized services used by healthcare professionals and ...

SearchDisasterRecovery

SearchStorage

  • M.2 SSD

    An M.2 SSD is a solid-state drive (SSD) that conforms to a computer industry specification and is used in internally mounted ...

  • kilobyte (KB or Kbyte)

    A kilobyte (KB or Kbyte) is a unit of measurement for computer memory or data storage used by mathematics and computer science ...

  • virtual memory

    Virtual memory is a memory management capability of an operating system (OS) that uses hardware and software to allow a computer ...

Close