Consumer Price Index

The Consumer Price Index (CPI) is a measure of the average change in prices over time for goods and services consumed by households. It is used to calculate inflation, which is the rate at which the overall price level of the economy is rising. The CPI is calculated by the Bureau of Labor Statistics (BLS) in the United States, and similar organizations in other countries. The BLS surveys prices for a basket of goods and services, and compares the cost of that basket in a base year to the cost of the same basket in a later year. The percentage change in the cost of the basket is the CPI for that later year.