Consumer price index
A statistical estimate of consumer price levels over time.
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The consumer price index (CPI) is a statistical estimate of the level of prices of goods and services bought for consumption by households.[1] A consumer price index is a statistical estimate of the level of prices of goods and services bought for consumption purposes by households, and it is computed by taking the weighted average price of a market basket of consumer goods and services.[1]
Quick Facts
- Field
- Economics
- First proposed by
- Joseph Lowe (1822)
- Typical calculation frequency
- Monthly or quarterly
- Common reporting agencies
- National statistical agencies
- Bureau of Labor Statistics (US)
- OECD
Facts from the source article.
Key facts and history
The U.S. Bureau of Labor Statistics describes the CPI as a measure of the average change over time in prices paid by urban consumers for a market basket of consumer goods and services.[2] The CPI measures inflation as experienced by consumers in their day-to-day living expenses.[3] The CPI includes taxes directly associated with the prices of specific goods and services, but excludes income and Social Security taxes.[3] The CPI reflects the buying habits of two target populations: All Urban Consumers and Urban Wage Earners and Clerical Workers.[3]
The CPI does not necessarily measure your own experience with price change.[3] The theory of a price basket index was first put forward in 1822 by Joseph Lowe, an English economist.[4]
What the cited sources add
The U.S. Bureau of Labor Statistics states that between December 2023 and December 2024, consumer prices experienced disinflation, with the CPI increasing 2.9 percent.[2] The Bureau of Labor Statistics notes that the CPI is sometimes called a cost-of-living index but differs in important ways from a complete cost-of-living measure.[3] A complete cost-of-living index would also take into account changes in governmental or environmental factors that affect consumers' well-being.[3] Since January 1999, a geometric mean formula has been used to calculate most basic indexes within the CPI.[3]
The broadest and most comprehensive CPI is called the All Items Consumer Price Index for All Urban Consumers for the U.S. City Average.[3]
References
- Wikipedia, "Consumer price index" (CC BY-SA 4.0), which cites: "OECD (2008), OECD Glossary of Statistical Terms", OECD Publishing, Paris (original not read by us) en.wikipedia.org
- "Consumer Price Index", U.S. Bureau of Labor Statistics. facts only, no text reused. bls.gov
- "Consumer Price Index Frequently Asked Questions", U.S. Bureau of Labor Statistics. facts only, no text reused. bls.gov
- Wikipedia, "Consumer price index" (CC BY-SA 4.0), which cites: Blume, "The new Palgrave dictionary of economics", 2019 (we also read that source) en.wikipedia.org
Each numbered sentence above was checked against the source it cites before publication. Sentences citing Wikipedia adapt text from the English Wikipedia article Consumer price index (contributors), used under CC BY-SA 4.0; this entry is available under the same licence. Other sources were used for facts only; no text or images are copied from them.
More in Economic Concepts & Models
Sources
Compiled from Wikipedia and the sources listed below. Text from Wikipedia is available under CC BY-SA 4.0; this entry is adapted from it.
- Wikipedia: Consumer price index (CC BY-SA 4.0).
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