Consumer Price Index (CPI)

Definition of "Consumer Price Index (CPI)"

Nativita  Warner real estate agent
Nativita Warner, Real Estate Agent Keller Williams Premier

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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Comments for Consumer Price Index (CPI)

Roslyn Roslyn said:

Should commission schedules be adjusted as CPI changes?

Jan 09, 2019  17:30:29

Real Estate Agent

According to the U.S. Department of Labor CPI released in November 2018, the all items index increased 2.2 percent for the 12 months ending November. Now it is up to every real estate broker to decide if they want to change their commission schedule based on this.  The average inflation of the United States in 2018 was 2.49 %. A slight increase in your commission schedule should not surprise anyone, especially in the first month of the year. But maybe you want to check on your competitor's approach, too.  

Jan 10, 2019  04:14:47


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