Consumer Price Index

## What this measures

This measures the price level of a basket of goods and services purchased by urban consumers in the United States, indexed to a 1982–1984 base of 100. It tracks changes in the cost of food, clothing, shelter, fuel, transportation, services and sales taxes.

## Why it matters

Changes in the Consumer Price Index show whether an organization's costs and revenues are keeping pace with the prices consumers face. A rising index erodes purchasing power and may force adjustments to wages, contracts and pricing strategy. Differences between an organization's cost structure and the CPI can reveal competitive advantage or pressure.

## How to read it

A rising index means consumer prices are increasing; a falling index means deflation. Compare the current level to earlier periods to gauge cumulative price change, or calculate percentage changes to measure inflation rates. Because the series is seasonally adjusted, month-to-month moves reflect real price pressure rather than predictable calendar effects.

## What it does not say

The index does not measure changes in the quality of goods, does not cover rural households, and does not show how price changes vary across income levels or regions within the 87 urban areas surveyed.

## Source

The Bureau of Labor Statistics collects prices monthly from roughly 4,000 housing units and 26,000 retail establishments across 87 urban areas. Palanor pulls the series from the FRED API nightly.