What is CPI-U?
The Consumer Price Index (CPI) is the statistical metric developed by the Bureau of Labor Statistics used to monitor the change in the price of a set list of products. The idea is that by monitoring the fluctuations in price it costs to purchase a set basket of goods, the government can track the cost of living for most individuals. The CPI-U is the CPI value for Urban Consumers, which excludes rural populations and represents approximately 80% of the population. The CPI and CPI-U do not directly measure inflation, but it gives a very good idea of whether we are in a period of inflation or deflation and how severe that change may be. As the Bureau of Labor Statistics states, “The CPI is generally the best measure for adjusting payments to consumers when the intent is to allow consumers to purchase at today’s prices, a market basket of goods and services equivalent to one that they could purchase in an earlier period.” Many argue that the CPI-U is not a very good measurement of inflatio
