U.S. Bureau of Labor Statistics,
CPI Detailed Report, monthly, and at < http://www.bls.gov/cpi/cpi_dr.htm >
See also Monthly Labor Review at < http://www.bls.gov/opub/mlr/welcome.htm >.
For more information:
http://www.bls.gov/cpi/
The Consumer Price Index
The Consumer Price Index (CPI) is a measure of the average change over time in the prices of consumer items—goods and services that people buy for day-to-day living. The CPI is a complex construct that combines economic theory with sampling and other statistical techniques and uses data from several surveys to produce a timely and precise measure of average price change for the consumption sector of the American economy. Production of the CPI requires the skills of many professionals, including economists, statisticians, computer scientists, data collectors, and others. The CPI’s surveys rely on the voluntary cooperation of many people and establishments throughout the country who, without compulsion or compensation, supply data to the government’s data collection staff.
PartI. The Index in Brief
Three Consumer Price Index (CPI) series. The Bureau of Labor Statistics (BLS) publishes CPI data every month. The three main CPI series are:
- CPI for All Urban Consumers (CPI-U)
- Chained CPI for All Urban Consumers (C-CPI-U)
- CPI for Urban Wage Earners and Clerical Workers (CPI-W)
The CPI for All Urban Consumers, or CPI-U, which BLS began publishing in January 1978, represents the buying habits of the residents of urban or metropolitan areas in the United States. The CPI for Urban Wage Earners and Clerical Workers, or CPI-W, the oldest of the series, covers a subset of the urban population.1 The prices used for producing these two series are the same. The CPI-U and CPI-W differ only in the consumer spending weights used to combine, or average together, basic indexes.2
The newest CPI series, the Chained CPI for All Urban Consumers (or C-CPI-U), also represents the urban population as a whole. BLS began publishing this series in August 2002 with data beginning in January 2000. The prices used in the C-CPI-U are the same as those used to produce the CPI-U and CPI-W, but the C-CPI-U uses a different formula and different weights to combine basic indexes. The formula used in the C-CPI-U accounts for consumers’ ability to achieve the same standard of living from alternative sets of consumer goods and services. This formula requires consumer spending data that are not immediately available. Consequently, the C-CPI-U, unlike the other two series, is published first in preliminary form and is subject to two subsequent scheduled revisions. (See below for more details.)
CPI populations. A consumer price index measures the price change experience of a particular group called its target population. The CPI uses two target populations for its main series:
- All Urban Consumers (the “U-population”)
- Urban Wage Earners and Clerical Workers (the “W-population”)
Both the CPI-U and the C-CPI-U target the U-population. The U-population, which was about 87 percent of the U.S. population in the 1990 census, covers households in all areas of the United States except people living in rural non-metropolitan areas, in farm households, on military installations, in religious communities, and in institutions such as prisons and mental hospitals.
The W-population, the target of the CPI-W, is a subset of the U-population. The W-population consists of all U-population households for whom 50 percent or more of household income comes from wages and clerical workers’ earnings. This group’s share of the population of the United States has diminished over the years. In 1990, the W-population was about 32 percent of the total U.S. population. The W-population excludes households of professional and salaried workers, part-time workers, the self-employed, and the unemployed, along with households with no one in the labor force, such as those of retirees. The CPI began using the current W-population effective with the CPI for January 1964, when the population was expanded to include nonfamily (single-person and unrelated-individuals) households.
Indexes for other populations. It is possible, although difficult, to construct consumer price indexes for other subsets of the U.S. population, such as the elderly or the poor. BLS has produced experimental indexes for some of these groups. See the discussion below for more details.
Footnotes
1 Specifically, the all-urban population consists of all urban households in Metropolitan Statistical Areas (MSAs) and in urban places of 2,500 inhabitants or more. Nonfarm consumers living in rural areas within MSAs are included, but the index excludes rural nonmetropolitan consumers and the military and the institutional population. The urban wage earner and clerical worker population consists of consumer units with clerical workers, sales workers, craftworkers, operatives, service workers, or laborers. More than one-half of the consumer unit’s income has to be earned from the above occupations, and at least one of the members must be employed for 37 weeks or more in an eligible occupation.
2 Until 1982, BLS maintained separate (but overlapping) samples of outlets and specific items for the W and U populations. Given little variance in the movements between the CPI-U and CPI-W and facing budget cuts, BLS dropped the separate samples for the W population. The CPI-U converted to rental equivalence effective with the indexes for January 1983; the CPI-W moved to rental equivalence 2 years later. Since January 1985, the movements of all CPI-W basic indexes have been identical to those of their CPI-U counterparts
referenced on dataset section Notes (#2)
