What Is the CPI (Consumer Price Index)?
The Consumer Price Index measures the change in prices paid by US consumers for a basket of goods and services. How it's built, what's in it, how core CPI differs, and how CPI compares with PCE.
In one sentence
CPI. The Consumer Price Index, published by the US Bureau of Labor Statistics. It tracks the prices of a broad basket of goods and services and is a common measure of inflation.
How it's built
Each month the Bureau of Labor Statistics records the prices of about 80,000 items, classified into more than 200 categories. The main index, the CPI-U, covers urban consumers, who make up over 90% of the US population.1 The prices are combined using weights from surveys of what households spend.
| Shelter | 35.6% |
|---|---|
| Other services | 25.1% |
| Goods other than food and energy | 19.2% |
| Food | 13.7% |
| Energy | 6.4% |
Bureau of Labor Statistics figures.2 Housing costs are over a third of the index, which is why rents move it so much.
Headline, core, and PCE
- Headline CPI includes everything. Over the 12 months to August 2026 it rose 3.4%.3
- Core inflation. Inflation measured without food and energy prices, which swing more than most other prices. Glossary leaves out food and energy, which swing more. Over the same 12 months it rose 2.4%.3
- The PCE price index, from a different agency, is the measure the Federal Reserve uses for its 2% goal.4
Learn it properly
- Inflation and Purchasing PowerPart 1: Foundations · Free
- Growth, Inflation, and Interest RatesPart 6: Strategy, Behavior, Accounts, and Taxes · Free
Notes and sources
- U.S. Bureau of Labor Statistics. Consumer Price Index: Frequently Asked Questions. Checked 2026-10-14. Back to text
- U.S. Bureau of Labor Statistics. Relative importance of components in the Consumer Price Indexes: U.S. city average, December 2025. Checked 2026-10-14. Back to text
- U.S. Bureau of Labor Statistics. Consumer Price Index, August 2026 (released September 11, 2026). Checked 2026-10-14. Back to text
- Board of Governors of the Federal Reserve System. Why does the Federal Reserve aim for inflation of 2 percent over the longer run?. Checked 2026-10-14. Back to text