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What is Consumer Price Index (CPI)?

The Consumer Price Index expresses the change in the current prices of the market basket of goods in a period compared to a base period. The CPI is usually computed monthly or quarterly. It is based on a representative expenditure pattern of urban residents and includes people of all ages.

What does the CPI measure?

As more people compete for apartments, rents go up. The CPI includes sales taxes. It excludes income taxes and the prices of investments, such as stocks and bonds. The CPI measures two commodities with wild price swings: food and energy commodities (oil and gasoline). These products are traded constantly on the commodities market.

How is CPI calculated?

CPI is calculated by tracking the change in the prices of a fixed basket of goods and services. The BLS refers to a variety of sources to calculate CPI, including the prices of goods and services from about 23,000 retail and service establishments throughout the U.S.

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