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

SearchCompliance

  • risk management

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

  • compliance as a service (CaaS)

    Compliance as a Service (CaaS) is a cloud service service level agreement (SLA) that specified how a managed service provider (...

  • data protection impact assessment (DPIA)

    A data protection impact assessment (DPIA) is a process designed to help organizations determine how data processing systems, ...

SearchSecurity

  • cybersecurity insurance (cybersecurity liability insurance)

    Cybersecurity insurance, also called cyber liability insurance or cyber insurance, is a contract that an entity can purchase to ...

  • phishing

    Phishing is a form of fraud in which an attacker masquerades as a reputable entity or person in email or other communication ...

  • cybercrime

    Cybercrime is any criminal activity that involves a computer, networked device or a network.

SearchHealthIT

SearchDisasterRecovery

  • business continuity plan (BCP)

    A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue ...

  • disaster recovery team

    A disaster recovery team is a group of individuals focused on planning, implementing, maintaining, auditing and testing an ...

  • cloud insurance

    Cloud insurance is any type of financial or data protection obtained by a cloud service provider. 

SearchStorage

  • NVMe over Fabrics (NVMe-oF)

    NVMe over Fabrics, also known as NVMe-oF and non-volatile memory express over fabrics, is a protocol specification designed to ...

  • logical unit number (LUN)

    A logical unit number (LUN) is a unique identifier for designating an individual or collection of physical or virtual storage ...

  • CIFS (Common Internet File System)

    CIFS (Common Internet File System) is a protocol that gained popularity around the year 2000, as vendors worked to establish an ...

Close