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  • Wendell Brock

Consumer Price Index

The Consumer Price Index is one of the most commonly used indicators used to measure inflation and deflation. The CPI measures the overall change in consumer prices based on about 80,000 different price quotes on a selection of goods and services over time. The data is collected monthly from 23,000 retail and service enterprises as well as 50,000 rental housing units. The collection of goods and services are considered a “basket;” this basket is filled with popular goods and services regularly purchased by Americans. The cost of this basket is compared to what it would have cost the year before, and then multiplied by 100 to determine the percent change.


You’ll notice that the report is for November. That is because the data hasn’t been collected for December, until the month is over. December’s data will be released in January, and so forth. This is why the CPI is considered a lagging indicator, because it is measuring the data that occurred in the past.

 






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