Business Glossary

measure of price level computed by the Bureau of Labor Statistics on a monthly basis. It is the ratio of the cost of specific consumer items in any one year to the cost of those items in the base period, 1982-1984 = 100. Because the CPI includes things consumers buy regularly, it is frequently called the cost of living index, The so-called market basket, covered by the index, includes items such as food, clothing, automobiles, homes, and fees to doctors.

measures prices of a fixed basket of goods bought by a typical consumer, including food, transportation, shelter, utilities, clothing, medical care, entertainment, and other items. The CPI, published by the Bureau of Labor Statistics in the Department of Labor, is based at 100 in 1982 and is released monthly. It is widely used as a cost-of-living benchmark to adjust Social Security payments and other payment schedules, union contracts, and tax brackets. Also known as the cost-of-living index.

measure of change in consumer prices, as determined by a monthly survey of the U.S Bureau of Labor Statistics. Many pension and employment contracts are tied to changes in consumer prices as protection against inflation and reduced purchasing power. Among the CPI components are the costs of housing, food, transportation, and electricity. Also known as the cost-ofliving index. Selected values of the index for all items, based on 1982-1984 = 100, are:

measurement of the rate of inflation according to a weighted market basket of goods and services that includes such items as transportation costs, health care costs, housing costs, and food costs. These statistics are released monthly by the United States Bureau of Labor Statistics.

federal government measure of the cost of living, also called the cost-of-living index. The Consumer Price Index is used as an economic indicator, measuring the rate of inflation by monitoring monthly and yearly price changes for major groups of consumer expenditures (e.g., food and beverages, housing, apparel, transportation, medical services, recreation, education, communication). Changes are also reported for individual items within those groups. The CPI is broken out by all U.S. consumers, all urban consumers, and some local areas. The CPI is also broken out by hourly paid urban wage earners and clerical workers (CPI-W) versus other urban consumers (CPI-U). The CPI is expressed as a measurement against a base period. In 1999, the base period was 1982-1984. The price index for all items sold in the base period is 100 and the CPI at the start of 1999 was 163.9. For example, if a family's average expenses for apparel were $100 in 1984, they would have to spend $163.90 in 1999 to get the equivalent value in goods. Many union contracts require wage increases according to increases in the CPI.