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 2010 a researcher at the Chinese Academy of Social Sciences estimated that pork made up 10% of China’s consumer price index (CPI). — The Economist, "Soaring pork prices hog headlines and sow discontent in China," 10 Sep. 2019 It was set at 1.9 percent to align it with [the consumer price index]. — Steve Schering, chicagotribune.com, "School board approves pay raise for Oak Park District 97 superintendent Kelley," 23 July 2019 The Labor Department will report the latest consumer price index figures on Thursday and the Commerce Department will report August retail sales data on Friday. — Washington Post, "Asian shares mostly higher after rise on Wall Street," 11 Sep. 2019 The Labor Department will report the latest consumer price index figures on Thursday, and the Commerce Department will report August retail sales data on Friday. — BostonGlobe.com, "For the second day in a row, traders unloaded technology stocks and shares in companies that rely on consumer spending. Microsoft dropped 1.1 percent, as did payment processors Visa and Mastercard, losing 2.8 percent and 3.9 percent, respectively.," 11 Sep. 2019 The Wisconsin State Journal reports Wednesday that Republican Rep. Dave Murphy plans to introduce a bill that would allow the UW Board of Regents to raise tuition by the consumer price index increase each year. — USA TODAY, "Leaping frogs, spiny lobsters, hostile roosters: News from around our 50 states," 26 July 2019 Meanwhile, China's consumer price index rose 2.8% in August from a year ago, which was faster than expected. — Laura He, CNN, "Chinese stocks fall after poor data points to further slowdown," 10 Sep. 2019 The Labor Department said Thursday that the consumer price index increased 1.6 percent in June from a year earlier. — BostonGlobe.com, "TSA screened record number of airport travelers at end of Fourth of July weekend," 12 July 2019 Compare that against the consumer price index, which gives a window into how easily companies can pass along price increases to their customers, notes Chun Wang, senior analyst at Leuthold. — Washington Post, "As investors watch trade wars, other problems percolate," 10 June 2019

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.

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Last Updated

15 Oct 2019

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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