What is CPI — Consumer Price Index?
The Consumer Price Index (CPI) measures the average change over time in the prices paid by U.S. urban consumers for a representative basket of goods and services. Published monthly by the Bureau of Labor Statistics, CPI is the headline inflation gauge referenced in news reports, Social Security cost-of-living adjustments, and most consumer-facing inflation discussions.
Live data: Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
Federal Reserve Economic Data (FRED) — · Monthly · 146 observations
Most recent observation: 330.29 Index 1982-1984=100 as of March 1, 2026.
Understanding CPI
CPI is the headline inflation number cited in most news coverage and used for Social Security cost-of-living adjustments, federal tax-bracket indexing, and federal benefit updates. It is calculated by the Bureau of Labor Statistics from roughly 80,000 prices collected each month across 75 metropolitan areas.
The index tracks a basket of goods and services organized into eight major categories: housing, transportation, food, medical care, recreation, education, apparel, and other. Each category is weighted by the share of household spending it represents, based on BLS's Consumer Expenditure Survey. Housing is the single largest component at roughly a third of the index, which is why shelter inflation drives so much of the headline number.
When commentators talk about the 'inflation rate,' they almost always mean the year-over-year change in CPI. A 3% CPI reading means prices are 3% higher than they were 12 months earlier.
How CPI is calculated
BLS collects prices monthly for roughly 80,000 goods and services across 75 urban areas and 24,000 retail outlets. Each item is weighted by its share of household spending (from the Consumer Expenditure Survey), summed into eight major categories, and combined into the all-items index. CPI uses a modified Laspeyres formula — a fixed basket updated every two years, with some substitution allowed within categories.
Historical context
CPI has been published since 1913. Its most famous episodes are the 1970s stagflation (CPI peaked at 14.8% in March 1980), the great moderation (sub-3% readings from the mid-1990s through 2020), and the 2021–22 inflation surge that drove CPI to 9.1% in June 2022 — the highest reading since November 1981. CPI's methodology has been revised several times, most significantly in the 1980s (shelter treatment) and 1990s (geometric mean within categories).
Frequently asked questions
What's the difference between CPI and inflation?
Inflation is the general rise in prices; CPI is the most common way to measure it in the U.S. When people say 'inflation was 3% last year,' they almost always mean CPI rose 3% year-over-year.
Does CPI overstate inflation?
Economists have long debated whether CPI overstates inflation by failing to adequately capture substitution and quality improvements. The Boskin Commission (1996) estimated CPI overstated inflation by 1.1 percentage points per year; BLS has since made methodology changes that likely narrowed that gap, but debate continues.
Is CPI seasonally adjusted?
BLS publishes both seasonally adjusted and not-seasonally-adjusted CPI. Most news coverage and market data uses the seasonally adjusted series because it removes predictable patterns (summer gasoline, winter heating) to reveal underlying trend. Social Security COLAs use the not-seasonally-adjusted CPI-W.
When is CPI released?
CPI is released monthly by BLS, usually the second or third week of the month, covering the prior month's prices. The release is one of the most market-moving U.S. data points — bond yields, equities, and the dollar all react within seconds.