CPI for May 2009
June 17, 2009The Consumer Price Index (CPI) is a measure of the average change in prices over time of goods and services purchased by households.
How is it calculated: The CPIs are based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors’ and dentists’ services, drugs, and other goods and services that people buy for day-to-day living. Prices are collected in 87 urban areas across the country from about 50,000 housing units and approximately 23,000 retail establishments-department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments. All taxes directly associated with the purchase and use of items are included in the index. Prices of fuels and a few other items are obtained every month in all 87 locations. Prices of most other commodities and services are collected every month in the three largest geographic areas and every other month in other areas. Prices of most goods and services are obtained by personal visits or telephone calls of the Bureau’s trained representatives.
In calculating the index, price changes for the various items in each location are averaged together with weights, which represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average.
The latest report can be found here. Here is a snapshot of the latest figures:
Good article.
The goods and services used to calculate the CPI index is typically termed as a ‘basket’. It is a very interesting study of how these baskets are determined and how is the data collected.
There is a FAQ @ http://www.bls.gov/cpi/cpifaq.htm that is a good starting point to read.