What is the Federal Cost of Living Index?
There is no official Cost of Living Index provided by the U.S. government. Steve Reed, an economist at the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI) program, said the CPI “is the closest thing we’ve got to the cost-of-living” index. The Consumer Price Index measures changes over time in what urban consumers pay for a basket of goods and services. According to the Bureau of Labor Statistics, the CPI is the most widely used measure of inflation. Pamela Villarreal, a policy analyst at the National Center for Policy Analysis in Dallas, pointed to the ACCRA Cost of Living Index as another good source of information on the cost of living. The ACCRA Cost of Living Index measures prices of goods and services among participating urban and suburban areas. The index “is designed to provide the best possible measure of relative differences among urban areas in the cost of consumer goods and services appropriate for professional and managerial households in the top income quintile
