Consumer Price Index

5 Pages 1156 Words

The Consumer Price Index, which is issued by the Bureau of Labor Statistics, is compiled to measure the movement of prices on goods and services purchased by consumers in the whole country. It is based on prices of the following:
§ FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine,
§ full service meals and snacks);
§
§ HOUSING (rent of primary residence, owners' equivalent rent, fuel oil,
§ bedroom furniture);
§
§ APPAREL (men's shirts and sweaters, women's dresses, jewelry);
§
§ TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle
§ insurance);
§
§ MEDICAL CARE (prescription drugs and medical supplies, physicians'
§ services, eyeglasses and eye care, hospital services);
§
§ RECREATION (televisions, cable television, pets and pet products,
§ sports equipment, admissions);
§
§ EDUCATION AND COMMUNICATION (college tuition, postage,
§ telephone services, computer software and accessories);
§
§ OTHER GOODS AND SERVICES (tobacco and smoking products,
§ haircuts and other personal services, funeral expenses).
It is also based on service fees and excise taxes, however, it excludes income tax and investment items. Prices are collected from eighty-seven urban areas across the country from approximately 50,000 landlords and tenants and 23,000 stores, hospitals, and other service establishments. The actual index number results from the comparison of current costs of goods and services to the cost of the same items from the thirty-six month base period between 1982-1984. Two indexes are derived monthly from these spending patterns: CPI-U and CPI-W. The CPI-U, introduced in 1978, is based upon all residents of urban areas, which make up eighty-seven percent of the population. The CPI-W is based upon all clerical and wage workers and one household member who has worked at least thirty-seven weeks in the past twelve m...