Consumer Price Index (CPI)
A monthly measure of average price changes in a fixed basket of goods and services purchased by urban consumers, produced by the Bureau of Labor Statistics.
What is Consumer Price Index (CPI)?
CPI tracks about 80,000 items monthly via surveys in 75 urban areas, with major weights like housing (42%), food (14%), and transportation (17%). For August 2025, CPI inflation was 2.9% year-over-year, up from 2.7% in July, with a 0.4% monthly rise driven by 0.5% shelter and 0.7% food increases. Core CPI, excluding food and energy, held at 3.1% annually, with energy up 0.7% monthly.
It uses a fixed basket, updated biennially, leading to higher readings than PCE due to less substitution accounting; in 2025, CPI averaged 0.4 points above PCE. Regional variations show South at 2.6%, Midwest 2.8%, Northeast 3.0% for August year-over-year. Chained CPI-U, allowing substitution, rose 2.7% annually in August, used for tax adjustments.
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