consumer price index

noun

Definition of consumer price index 

: an index measuring the change in the cost of typical wage-earner purchases of goods and services expressed as a percentage of the cost of these same goods and services in some base period

called also cost-of-living index

Examples of consumer price index in a Sentence

Recent Examples on the Web

In the new deal, salary increases will be based on the consumer price index, with the floor for increases set at 1.5 percent and the ceiling for increases set at 3.5 percent. Steve Schering, chicagotribune.com, "New Oak Park District 97 teacher contract includes longer school days for elementary students," 5 June 2018 Inflation check: The Labor Department is expected to report Thursday that inflation held steady in June, with the consumer price index increasing 0.2%. David Lazarus, latimes.com, "California Inc.: A tough job market for recent college grads," 9 July 2018 After hitting $13 next year, the city’s minimum wage will rise annually with changes in the consumer price index, up to 2.5 percent. Alexia Elejalde-ruiz, chicagotribune.com, "Chicago's minimum wage is about to jump to $12 per hour. Who are the winners and the losers?," 29 June 2018 The Labor Department said Thursday that the consumer price index ticked up just 0.1 percent in June. Christopher Rugaber, Fox News, "US inflation reaches 2.9 percent in June, highest in 6 years," 13 July 2018 The National Bureau of Statistics announced that the consumer price index was 1.9 per cent in June from a year earlier, up from 1.8 percent in May. There was little indication of the impact of rising U.S. tariffs on Chinese products. Annabelle Liang, The Seattle Times, "Asian markets mirror optimism on Wall Street," 10 July 2018 The Labor Department said Thursday that the consumer price index climbed 2.8 percent last month from a year earlier, putting inflation on its fastest annual pace since February 2012. Heather Long, Washington Post, "The Finance 202: The Fed will likely raise interest rates today. But will it weigh in on Trump's trade war?," 13 June 2018 The consumer price index for auto insurance jumped up 25.9 percent — the largest five-year increase — from early 2012 through early 2017, according to ValuePenguin.com. Susan Tompor, chicagotribune.com, "Spike in auto insurance premiums driven by high-tech features," 29 Jan. 2018 Staff suggests a 53% increase to reflect changes in the consumer price index — a measure of inflation — over that time and bring Costa Mesa's charges in line with other Orange County cities. Luke Money, latimes.com, "Costa Mesa council will discuss next city budget at special meeting," 25 May 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'consumer price index.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

See More

First Known Use of consumer price index

1945, in the meaning defined above

Keep scrolling for more

Learn More about consumer price index

Share consumer price index

Statistics for consumer price index

Last Updated

20 Aug 2018

Look-up Popularity

Time Traveler for consumer price index

The first known use of consumer price index was in 1945

See more words from the same year

Keep scrolling for more

More Definitions for consumer price index

consumer price index

noun

Financial Definition of consumer price index

What It Is

The consumer price index (CPI) measures changes in consumer prices. The Bureau of Labor Statistics (BLS) calculates and publishes CPI data monthly. The CPI is the most recognized inflation measure in the United States.

How It Works

The consumer price index measures the change in the retail prices of approximately 80,000 specific goods and services, called the market basket. The goods and services fall into eight major categories: food and beverage, housing, apparel, transportation, medical care, recreation, education and communication, and other. The BLS updates the market basket every few years to remove obsolete items.

To get the data, BLS economic assistants call or visit approximately 23,000 stores and contact approximately 50,000 landlords or tenants in 87 urban areas every month to get prices on the items in the market basket. Commodity specialists review the information and make adjustments for changes in size or quality of the product.

The BLS then compares the cost of the market basket to the same basket in the starting year (usually 1982-1984). To do this, the BLS sets the average price of the market basket during the years 1982, 1983, and 1984 to equal 100. Then in every subsequent period, the BLS calculates price changes in relation to that number. A resulting CPI of 120, for example, means that prices are 20% higher than they were in the base period. By comparing the difference in CPI in consecutive months or years, we can calculate the percentage increase in prices, giving us the inflation rate.

Why It Matters

The CPI is perhaps the best way we have to gauge the amount of inflation in the economy. The affect of inflation directly or indirectly affects nearly every financial decision, from consumer choices to lending rates, from asset allocation to stock prices. By accurately measuring the amount of inflation, people, business, and the government are better able to make future financial decisions. For more information about the Bureau of Labor Statistics inflation measures, visit {ia_ext|www.bls.gov/cpi|http://www.bls.gov/cpi}.

Source: Investing Answers

consumer price index

noun
consumer price in·dex

Legal Definition of consumer price index 

: an index measuring the change in the cost of typical wage-earner purchases of goods and services in some base period

called also cost-of-living index

More from Merriam-Webster on consumer price index

Britannica.com: Encyclopedia article about consumer price index

Comments on consumer price index

What made you want to look up consumer price index? Please tell us where you read or heard it (including the quote, if possible).

WORD OF THE DAY

by word of mouth

Get Word of the Day daily email!

Test Your Vocabulary

Name that Food Quiz

True or False

Test your knowledge - and maybe learn something along the way.

TAKE THE QUIZ
SCRABBLE® Sprint

Test Your Knowledge - and learn some interesting things along the way.

TAKE THE QUIZ

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!