Definition: The Consumer Price Index - CPI : Explained


Published by the Bureau of Labor Statistics, the Consumer Price Index is a measure that views the monthly changes in price for a basket of consumer goods and services. Among them are clothing, food, transportation, utilities, shelter and medical care. The price index reflects differences from prior periods of what urban consumers typically pay.

The CPI arrives at weighted averages -- these, based on price changes for individual basket items which are then assigned weights. Doing this monthly or quarterly throughout the year depending on the country.

Also termed the 'cost-of-living index', the CPI is used to signal periods of price inflation and price deflation.











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