The Consumer Price Index (CPI) is a gauge of how prices for a market basket of consumer goods and services have changed on average over time for urban consumers. The monthly change in prices paid by American consumers is tracked by the Consumer Price Index (CPI). The CPI is calculated by the Bureau of Labor Statistics (BLS) as a weighted average of prices for a selection of products and services that is indicative of total consumer spending in the United States.
One of the most widely used indicators of inflation and deflation is the CPI. In contrast to the producer price index (PPI), which tracks changes in the prices paid to American producers of goods and services, the CPI report employs a different survey methodology, price samples, and index weights.
A representative basket of products and services is used to calculate the Consumer Price Index, which tracks the overall change in consumer prices over time. The CPI is the most commonly cited indicator of inflation, closely followed by other indicators utilized by policymakers, the financial sector, companies, and consumers. The frequently cited CPI is based on an index that accounts for 93% of the U.S. population, while cost-of-living adjustments to government benefits are made using a comparable index that accounts for wage earners and clerical workers. The CPI is based on roughly 94,000 price quotes that are gathered each month from about 23,000 retail and service businesses and 43,000 rental housing units.
To calculate the change in shelter expenses, including those for owner-occupied housing, which makes up about a third of the CPI, housing rentals are used.
