What is consumer price index (CPI)?

The Consumer Price Index (CPI) is a measure of the average change in prices paid by urban consumers for a market basket of goods and services, published monthly by the Bureau of Labor Statistics. CPI-U covers approximately 93% of the U.S. population and tracks roughly 80,000 items across 200 categories — serving as the primary gauge of inflation that determines cost-of-living adjustments for Social Security, tax brackets, and wage negotiations.

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Updated

Key facts

  • CPI-U (All Urban Consumers) is the most widely cited inflation measure, covering 93% of the U.S. population — it tracks prices in 75 urban areas across approximately 80,000 items weighted by actual consumer spending patterns from the Consumer Expenditure Survey.
  • The CPI basket is weighted by spending category: shelter (36.2%), food (13.5%), transportation (16.7%), medical care (8.3%), energy (6.9%), apparel (2.5%), and other goods and services (16%) — shelter's massive weight means housing costs dominate the headline number.
  • Core CPI (excluding food and energy) is watched separately because food and energy prices are volatile — but for households in financial distress, food and energy are non-discretionary expenses that consume 25-40% of lower-income budgets.
  • CPI is used to adjust Social Security benefits (COLA), federal income tax brackets, SNAP benefits, military pay, and federal pensions — a 1 percentage point error in CPI measurement affects hundreds of billions in government spending.
  • CPI breakdowns are contextual evidence for the American Distress Index rather than ADI inputs: headline CPI inflation rate, healthcare CPI premium (healthcare inflation minus core CPI), auto insurance CPI premium, shelter CPI, cumulative grocery price index, and the wage-CPI spread each show where households are squeezed hardest, the same pressure the ADI captures through its Debt Burden and Safety Net & Buffer domains.

Related data

How Is CPI Calculated?

The Bureau of Labor Statistics samples prices, applies expenditure weights, and publishes Consumer Price Indexes relative to a reference base. BLS publishes both seasonally adjusted and not-seasonally-adjusted series. Seasonal adjustment removes recurring calendar patterns for short-term comparison, and BLS may revise adjusted history when it updates seasonal factors.

Which CPI Basis Does This Site Use?

The current all-items rate on this site is computed from the seasonally adjusted CPI-U series CPIAUCSL. The live food, food-at-home, shelter, energy, medical-care, and prescription-drug CPI indicators in this cluster likewise use seasonally adjusted national series whose IDs begin with CUSR. Historical BLS news-release headlines may instead quote not-seasonally-adjusted 12-month changes; the basis must travel with the number.

Rate Versus Level

CPI is an index level; an inflation rate is a percentage change in that index. Grocery prices are 31.9% above January 2020 as of September 2026, computed from seasonally adjusted BLS Food-at-Home CPI series CUSR0000SAF11. This live, source-bound reading replaces an undated typed magnitude.

CPI and the American Distress Index

CPI measures are contextual evidence rather than ADI inputs. When prices outrun income, required debt payments claim more of the budget and the savings cushion thins — pressure the ADI observes downstream through its Debt Burden and Safety Net & Buffer domains.

State-by-state differences

BLS publishes regional and metro-area CPI data but not state-level CPI. Regional variation is significant — shelter and energy costs drive the biggest geographic differences in experienced inflation.

StateKey difference
CaliforniaPart of the West region CPI. Los Angeles-Long Beach-Anaheim and San Francisco-Oakland-Hayward metro areas have their own CPI series; their readings can differ from the national series because local spending and price patterns differ.
TexasPart of the South region CPI. Houston-The Woodlands-Sugar Land and Dallas-Fort Worth have their own metro CPI series. Generally tracks close to national average but energy costs create volatility.
New YorkNew York-Newark-Jersey City metro has its own CPI series — one of the most closely watched regional measures. Shelter costs and food prices consistently above national average.
FloridaMiami-Fort Lauderdale-West Palm Beach and Tampa-St. Petersburg have metro CPI series. Insurance costs and shelter inflation have pushed Florida's effective inflation above the national rate since 2022.
OhioPart of the Midwest region CPI. Cleveland-Akron has a discontinued metro CPI series. Generally below national average due to lower housing costs, but food and energy inflation track close to national.

Questions about the Consumer Price Index

What is the CPI currently?

As of September 2026, the year-over-year CPI-U inflation rate computed from seasonally adjusted series CPIAUCSL is 3.72%. The index level itself — the basket's cost relative to its 1982-84 base of 100 — is published monthly by the BLS alongside the rate.

How does CPI affect Social Security benefits?

Social Security Cost-of-Living Adjustments (COLAs) are based on CPI-W (Wage Earners), not CPI-U. Social Security determines the COLA for the following January by comparing third-quarter CPI-W with the applicable comparison quarter, usually the previous year's third quarter. Critics argue CPI-W underweights healthcare, which is a larger expense for retirees.

Is CPI the same as the inflation rate?

CPI is an index number. The inflation rate is the percentage change in that index over a period — usually 12 months. When media report an inflation figure, they mean CPI-U rose by that much compared with the same month a year earlier. The index level matters for understanding cumulative price increases; the rate matters for the past year alone.

Why do some economists say CPI overstates or understates inflation?

CPI may overstate inflation by not fully accounting for quality improvements (a $1,000 laptop today is far better than in 2005) or consumer substitution. It may understate inflation for lower-income households whose spending skews toward food, shelter, and energy — categories with above-average inflation.

How does CPI connect to the American Distress Index?

CPI breakdowns are contextual evidence for the American Distress Index rather than ADI inputs. Healthcare CPI premium, auto insurance premium, grocery cumulative index, and wage-CPI spread each capture a dimension of how price increases squeeze household budgets, the same pressure the ADI registers downstream in its Debt Burden and Safety Net & Buffer domains through required debt payments and the personal saving rate.

Related terms

  • InflationA rise in the overall level of prices over time.
  • Cost of LivingHow much money it takes to cover basic expenses, such as housing, food and transportation, in a given place at a given time.
  • Purchasing PowerThe goods and services purchasable with a given amount of money.
  • Real WagesPay adjusted for inflation. Real wages grow only when pay rises faster than prices.
  • Shelter InflationThe housing portion of the Consumer Price Index, based mainly on rents and owners’ equivalent rent.
  • Federal Funds RateThe interest rate banks charge each other for overnight loans, which the Federal Reserve steers into a target range it sets.
  • Wage StagnationA period when inflation-adjusted wages fail to rise.
  • Debt Service RatioRequired minimum debt payments as a percentage of disposable personal income. 11.11% in Q2 2026, about one in every nine dollars of after-tax income.

Sources and method

We write with assistance from AI tools. Figures come from the data and sources named on this page.