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Consumer Price Index Cpi

Definition of "Consumer Price Index (CPI)"

Deb Haddock
  Platinum Realty

An average of the prices of goods and services commonly bought by families in urban areas. This indexes the most well-known inflation gauge and is often referred to as the cost-of-living index, which labor contracts, rents, and social security are tied to. The CPI measures the cost of buying a fixed bundle of goods, representative for the purchase of the typical working class, urban family. The index excluding volatile energy and food costs is often called core rate of inflation. The base year for the CPI index was 1982-84 at which time it was assigned 100. The CPI is important to landlords because it helps keep the base monthly rent in pace with inflation. The monthly rent will increase in a percentage equal to the increase of the CPI figure. The Bureau of Labor Statistics of the U.S. Department of Labor publishes the CPI figures around the 18th of each month. See also GDP deflator: price indices; producer price index (PPI).

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