Consumer Price Index (CPI) — Financial Glossary

Definition: A measure of the average change over time in the prices paid by consumers for a basket of goods and services.

What is CPI?

The Consumer Price Index (CPI) is a statistical measure that tracks the average change in prices paid by urban consumers for a representative basket of goods and services. It is published monthly by the Bureau of Labor Statistics (BLS).

What's in the basket?

The CPI basket includes categories such as food, housing, transportation, medical care, recreation, education, and communication. Housing is the largest component, making up about 33% of the index.

CPI vs. inflation

CPI is the most widely used measure of inflation. When people say "inflation is 3%," they typically mean the CPI increased by 3% over the past year.