What is US CPI (Consumer Price Index?

US Consumer Price Index (CPI) measures how much the prices of goods and services have changed over time in US. It is calculated and published monthly by US Bureau of Labor Statistics (BLS).

The Consumer Price Index (CPI) can be presented in 3 ways:

• Consumer Price Index - The CPI calculated by the BLS, for example 317.68 for December 2024.
• Monthly Inflation Rate - The CPI change rate from a month ago, for example 0.39% for December 2024.
• Annual Inflation Rate - The CPI change rate from a year ago, for example 2.90% for December 2024.

If you go to this Moody’s Analytics Website, you will see the latest US CPI listed with other countries' CPIs:

                Reference    Last    Previous
                ---------   ------   --------          
United States    Dec 2024   317.68    316.44 
China            Dec 2024   100.1     100.2  
Germany          Dec 2024   121       120.3  
France           Dec 2024   120.52    120.05 
United Kingdom   Dec 2024   135.6     135.1  
...

The steps to calculate the US CPI are:

1. Updating the representative basket of goods and services, about 80,000 items, to reflect changes in consumer spending habits.

2. Collecting prices of the goods and services in the basket from a sample of retail and service providers.

3. Summarizing collected prices with adjustments and weights to generate the total price.

3. Indexing the total price against a baseline, which is the total price of December 1982. So CPI for December 1982 is 100.00.

4. Calculating Monthly Inflation Rate as ( (This Month CPI) - (Last Month CPI) ) / (Last Month CPI).

5. Calculating Annual Inflation Rate as ( (This Month CPI) - (Year-Ago CPI)) / (Year-Ago CPI).

US CPI may also be reported in 2 variations:

• All CPI - The CPI for all goods and services in the representative basket.
• Core CPI - The CPI for goods and services in the representative basket without food and energy items.

If you go to this Wall Street Journal Website, you will see the both variations are reported:

U.S. Consumer Price Index
                        Inflation Rate
            Dec 2024   Monthly   Annual
            --------   -------   ------
All items    315.605    0.04%     2.9%
Core         322.007    0.02%     3.2%

⇒ Historical Values of Unadjusted CPI

⇐ Introduction to US CPI and Inflation Rate

⇑ Introduction to US CPI and Inflation Rate

⇑⇑ Interest Rates