What is the consumer price index and what does it mean to me?
A consumer price index measures a price change for a constant market basket of goods and services from one period to the next within the same city (or in the Nation). It is a price index determined by measuring the price of a standard group of goods meant to represent the typical market basket of a typical urban consumer. Related, but different, terms are the CPI, the RPI, and the RPIX used in the United Kingdom. It is one of several price indices calculated by most national statistical agencies. The percent change in the CPI is a measure of inflation. The CPI can be used to index (i.e., adjust for the effects of inflation) wages, salaries, pensions, or regulated or contracted prices. The CPI is, along with the population census and the National Income and Product Accounts, one of the most closely watched national economic statistics. Two basic types of data are needed to construct the CPI: price data and weighting data. The price data are collected for a sample of goods and services f
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The CPI affects nearly all Americans because of the many ways it is used. Following are major uses: as an economic indicator, as a deflator of other economic series, as a means of adjusting dollar values. The CPI reflects spending patterns for each of two population groups: all urban consumers and urban wage earners and clerical workers. The all urban consumer group represents about 87 percent of the total U.S. population. It is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed, and retired people, as well as urban wage earners and clerical workers. Not included in the CPI are the spending patterns of people living in rural nonmetropolitan areas, farm families, people in the Armed Forces, and those in institutions, such as
