An index of prices used to measure the change in the cost of basic goods and services in comparison with a fixed base period.
An important inflation measure computed by the U.S. Department of Commerce, Bureau of Labor Statistics (BLS), which is released monthly around the 15th of the month at 8:30 A.M. Eastern Time. The CPI reports price changes in over 200 categories, which are grouped into eight major areas; it also includes income taxes and Social Security taxes. The CPI compares the cost of a “market basket” of some 385 goods and services with the cost of the same items during the previous month or year. In order to reduce volatility, the core CPI data exclude food and energy prices. Data for the previous three months are revised monthly. Typically they are not substantial revisions. Major benchmark revisions occur about every ten years. The CPI measures prices of goods and services for two population groups. The All Urban Consumers index (CPI-U) represents around 80 percent of the total U.S. population. It also measures prices that urban wage earners and clerical workers (CPI-W) pay. To produce the CPI, the Bureau of Labor Statistics surveys retail stores throughout the United States and gathers price information on thousands of items. Each price is put into one of the 200 expenditure categories and weighted by importance, which allows price changes in the categories to be estimated.
(economics) A statistical estimate of the level of prices of goods and services bought for consumption purposes by households.