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The Consumer Price Index:
Questions and Answers

Questions and answers about the Consumer Price Index (CPI)

We need your assistance in measuring the rate of inflation in the U.S. economy. The Bureau of Labor Statistics is asking for your voluntary participation in the Consumer Price Index survey to help provide an accurate measurement of changes in the cost of the many goods and services normally purchased by urban consumers. Here are several questions and answers that provide information about the CPI Thank you for your cooperation in this important program.

What is the CPI?

The CPI is the Nation's chief measure of inflation at the retail level. It measures changes over time in the cost of buying a fixed market basket of goods and services needed for day-to-day living. Calculated and published by the Bureau of Labor Statistics, the CPI is used by business, labor, and government for making informed economic decisions. It is widely used to adjust payments under collective bargaining agreements, and the Federal Government uses the CPI to adjust Social Security, personal income taxes, and other program payments for the effects of inflation.

What does the CPI include?

The CPI measures price changes for all types of goods and services that are purchased by urban consumers, whether costly or inexpensive, whether purchased often or infrequently. Each item is represented in the index to the degree that it is purchased. These items are divided into eight major groups: Food and beverages, apparel , transportation, medical care, recreation, education and communication, other goods and services, and housing. Investment items, such as the purchase of stocks, bonds, or homes, are not priced in the CPI, since they do not represent direct consumption of goods and services by consumers.

How does BLS get the information on price change for the CPI?

BLS employees visit selected retail stores, houses, apartments, and other establishments in urban areas on a regular basis to collect the prices of the items included. Prices are collected monthly in Chicago, Los Angeles, and New York. In all other areas, food, fuel, and other selected items are priced monthly. The rest of the items are priced every other month.

Who is covered by the CPI?

There are, in effect, two CPI's. One represents the expenditures of all urban consumers (CPI-U); the other represents urban wage earners and clerical workers (CPI-W). The indexes do not take into account the buying habits of persons living on farms or in rural areas, persons in military service, or those in institutions.

How was my establishment selected to participate?

Your establishment was selected primarily from information obtained from a household survey. In this survey, households provided data on where they purchased various types of goods and services and the dollar amount of these purchases. From these data, a sample of establishments was selected for pricing of several categories of items.

When and how is the CPI published?

The CPI data appear first in a news release usually issued between the 10th and 15th day of each month, reporting data for the previous month. Generally, the CPI is reported in the newspapers and on TV at this time. The Monthly Labor Review also publishes CPI data each month. The most comprehensive report on the CPI appears in the periodical CPI Detailed Report, issued monthly.

Will the information I give you be kept confidential?

All information given by you to BLS for this survey is confidential. BLS staff are sworn to maintain the confidentiality of all responses. No one has access to any of the individual information. All information is represented only in the form of statistical summaries.

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