What is the Consumer Price Index?
BOSTON – The latest Consumer Price Index is now available.
You've likely heard of it before and quite possibly glazed over with disinterest. But wait, before you stop reading, let's talk about what CPI is and what the report means for you.
Have you ever wanted to know how the prices you pay for goods and services are changing over time?
Well, that is essentially what the Consumer Price Index is. Every month, it measures the change in prices for different items. It is often used to measure inflation as well.
Greg McBride, chief financial analyst with Bankrate, spoke to WBZ-TV about what this data says about the health of our economy and the cost of living.
"Shelter, motor vehicle insurance and personal care. These are really the three categories that continue to be the main trouble spots that go up every month, month in and month out," McBride said. "And they've been going up at an outsized pace. That has to change if we're going to see inflation get down to this 2% annual rate and stay there, and so far those have been the holdout categories."
Some of the major categories that make up the Consumer Price Index include:
- Food
- Energy
- Medical Care
- Education & Communication Services
- Shelter
- Transportation
"I think the important thing is this. When we talk about a lower rate of inflation, or a declining rate of inflation, we're not talking about prices coming down," McBride said. "The reality of it is, the Consumer Price Index is 18% higher now than it was three years ago. So even if prices didn't go up anymore, they're still 18% higher than they were three years ago – that's what households are feeling."
You can look at the Consumer Price Index by clicking here.
