The 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 country's inflation rate.

Computation

The 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...