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How the CPI Is Built

A basket, a set of prices, and a base. The index is not the inflation rate. The rate is a change in the index.

By Arthur Lin, Economics Columnist

Washington1 min read

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a tall building with columns and statues on the side of itPhoto by Francesco Ungaro on Unsplash

The consumer price index is a weighted basket of things households buy. The Bureau of Labor Statistics prices the basket and publishes an index. The number people quote as 'inflation' is usually a percent change in that index over a month or a year.

The distinction matters when you compare months. A high index level can coexist with a small monthly change, and a low-looking level can still be rising quickly. Read the period the release names. 'September' on a CPI story is the month being measured, not necessarily the morning the number was published.

Core indexes leave out food and energy because those prices jump. They are not a claim that food and energy do not count at the register. They are a way of seeing the rest of the basket. A release that prints both is offering two views, not a contradiction.

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