Consumer Price Index (CPI) Definition

The consumer price index is an economic indicator that measures changes in prices of typical consumer expenses. It is also used to measure inflation and the cost of living in a geographic area. For example, if living expenses rise in a particular region due to inflation, this would result in an increase in that region’s CPI. The CPI is published monthly by the Bureau of Labor Statistics in the Department of Labor.

Consumer Price Index Basket

Calculate the CPI using the prices of items in a “basket” of typical consumer goods and services. The basket includes food, transportation, shelter, clothing, medical care, entertainment, and other items. Prices are determined by samples taken from stores or providers in the relevant geographic area. Then the prices are weighted according to the item’s significance to the consumer. The core CPI is a variant of the CPI that excludes food and energy prices.

Cost of Living Index

You can also call the consumer price index the cost of living index.

Headline Inflation Definition

Also refer to the consumer price index as headline inflation.

US CPI Components

The U.S. CPI covers more than 200 categories of goods and services. The categories fall into the following 8 groupings:
1. Food and Beverages
2. Housing
3. Apparel
4. Transportation
5. Medical care
6. Recreation
7. Education and Communication
8. Other Goods and Services
If you want to learn how to price for profit, then download our Pricing for Profit Inspection Guide.

[box]Strategic CFO Lab Member Extra
Access your Strategic Pricing Model Execution Plan in SCFO Lab. The step-by-step plan to set your prices to maximize profits.
Click here to access your Execution Plan. Not a Lab Member?
Click here to learn more about SCFO Labs[/box]

Consumer Price Index Homepage
If you want more information about the CPI, then go to: www.blg.gov/cpi.
If you want more information about the CPI frequently asked questions, then go to: www.bls.gov/cpi/cpifaq.
US CPI Historical Data
If you want historical CPI data, then go to: ftp.bls.gov/pub.

ARTICLES YOU MIGHT LIKE

Is Mexico the New China?

June 1, 2023

In the wake of the COVID-19 pandemic and escalating tensions with China, American companies are actively seeking alternatives to mitigate their supply chain risks and reduce dependence on Chinese manufacturing. Nearshoring, the process of relocating operations closer to home, has emerged as an explosive opportunity for American and Mexican companies to collaborate like never before.

Changing Markets Affect on Valuations

August 2, 2022

Economics back in January 2021 Back in early 2021 there were certain signs that the economy was going to change in some way, and many predicted this change would not be positive. Post Pandemic in January 2021 the U.S. Government continued to pour billions of dollars into the economy by printing more money. Economics 101

Product Life Cycle Stages

August 17, 2018

See also: Product Life Cycle Company Life Cycle Why You Need a New Pricing Strategy Increasing Pricing on Products What is the Product Life Cycle? A product life cycle includes stages the product experiences throughout its lifetime – from conception of the idea to the decline and abandonment of the product. Some products experience longer

MARCH 28TH-31ST 2022

Days

Hours

Min

August 7-10th, 2023

Days

Hours

Min

SHARE THIS ARTICLE