Consumer Price IndexEssay Preview: Consumer Price IndexReport this essayConsumer Price IndexThe Consumer Price Index (CPI) provides a standardized method for comparing the average level of prices faced by the consumers and households of a nation over time. Price-level information is vital to a wide range of personal, government, and business decision makers. The CPI focuses solely on the prices faced by consumers and does not attempt to reflect prices faced by all buying entities in a country. Nevertheless, it is the most commonly used price-level indicator in a nation. It is the basis for the calculation of a countrys inflation rate.
COMPUTATIONThe Bureau of Labor Statistics (BLS) publishes CPI data monthly. BLS workers collect price data on a set market basket of goods and services in selected cities across the country each month. The market basket includes hundreds of goods and services typically purchased by consumers. The price data is then weighted to represent the mix of goods and services typically purchased by consumers. The mix of goods and services and the weights are based on the Consumer Expenditure Survey, a national survey of the spending habits of 29,000 families (BLS, “How BLS Measures”). The decennial census of the population is used for selection of the urban areas included in the monthly surveys.
Computed and Assessable
Sets of Information
BLS: