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Did You Know?Did You Know?

Consumer Price Index (CPI) - Calculating Price Changes Over Time

Consumer Price Index (CPI) - Calculating Price Changes Over Time

The Consumer Price Index (CPI) is compiled monthly by the U.S. Bureau of Labor Statistics. It is a gauge of inflation that measure changes in the prices of basic goods and services. It measures housing, food, clothing, transportation, medical care, recreation, and education.

The CPI is used as a benchmark for making adjustments in Social Security payments, wages, pensions, and tax brackets to keep them in tune with the buying power of the dollar. It is often incorrectly referred to as the cost-of-living index.

The CPI is used to calculate how prices have changed over the years.
For example, to calculate how much money would be needed in 1950 to purchase $8 of an identical amount of goods and services in 2012:

The CPI for 1950: 24.1
The CPI for 2012: 232.4
1950 price = 2012 price x (1950 CPI / 2012 CPI)

$0.89 = $8.00 x (24.1 / 232.4)

To calculate the cost of a good or service in 1950 prices to today's prices:

The CPI for 1950: 24.1
The CPI for 2012: 232.4
2012 price = 1950 price x (2012 CPI / 1950 CPI)

You can also view the U.S. city CPI average from 1913 to present.

View similarly tagged entries:

consumer, government

Sources:

Websites

Last updated by harbisons on Feb. 21, 2012

Disclaimer...

While the Library has verified the information presented in these files in what it considers to be reliable and authoritative sources, it cannot take responsibility for nor guarantee the accuracy of the information presented.