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Consumer Price Index

Also called: CPI

Joshua Terry

What is the Consumer Price Index?

The Consumer Price Index, or CPI, is an index measuring the average change in price over time of a fixed basket of consumer goods and services in the United States. Released monthly by the U.S. Department of Labor’s Bureau of Labor Statistics, or BLS, the CPI is commonly used to measure inflation.

  • The CPI measures the average change over time in what urban consumers paid for specific consumer goods and services.
  • The CPI is commonly used by policymakers and financial professionals as a measure for inflation.

The CPI is calculated by using the expenditure data from the BLS’ Consumer Expenditure Survey. In calculating the CPI, goods and services are weighted according to their CES expenditures. The CPI index covers two populations. The CPI-U is the more broad-based index, accounting for most of the population through its focus on urban consumers, while the CPI-W covers only the subset of urban wage earners and clerical earners. Indexes are also available for major consumption categories, including food & beverages, housing, and transportation.