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[Joanne98]

Consumer Price Index (CPI)
The CPI measures the average price of a fixed set (or basket) of goods and services. The basket of goods is intended to reflect all of the items a typical family buys to achieve some minimum standard of living in some base period (currently, 1982-1984). The basket is adjusted every ten years or so. The CPI does not count the price of each item equally but weights each according to its share of total household expenditures in the base period, so that changes in the index from one period to the next are broadly reflective of changes in a representative household's current cost of living. The weightings are determined from detailed expenditure information provided by families and individuals on what they actually bought. For the current CPI, this information was collected from the Consumer Expenditure Survey over the two years 2001 and 2002.



The CPI is compiled monthly by the Bureau of Labor Statistics (BLS). Data collectors survey 23,000 retail and service establishments and 50,000 landlords every month and collect price data on about 80,000 items. The items are grouped into 8 categories:

Food and beverages
Housing
Apparel
Transportation
Medical care
Education and communication
Other goods and services


There are three main CPI series:



CPI for all urban consumers (CPI-U). This is the most frequently reported statistic in the media. It is based on the buying habits of the residents of urban or metropolitan areas in the United States, a segment of the population which accounts for about 87 percent of the U.S. population.
Chained CPI for all urban consumers (C-CPI-U). This index applies to the same target population as the CPI-U. The same raw data are used, but a different formula is employed to calculate average prices. The chained CPI was developed to overcome a shortcoming of the CPI-U series, which does not account for the changes that people make in the composition of goods that they purchase over time, often in response to price changes. The alternative method of the C-CPI-U is intended to capture consumers' behavior as they respond to relative price changes.
CPI for urban wage earners and clerical workers (CPI-W). This is a subset of the CPI-U group and represents about 32 percent of the total U.S. population.
Another CPI index economists find useful is the CPI research series:

CPI research series (CPI-U-RS). When a change is made in the way the CPI is calculated, the BLS does not revise previously published CPI data using the new method. But the BLS does publish a methodologically consistent series, the CPI research series, for those interested in studying price trends over longer periods. The series provides estimates, for the period since 1977, of what the CPI would have been had the most current methods been in effect. It is updated whenever new methods are introduced. The full name of the research series is CPI-U Research Series Using Current Methods.
CPI-Related Links on this site
CPI and inflation data calculated from it can be found for more than 200 other countries here.
You can compare CPI inflation with other measures of inflation for the United States here.
http://www.clevelandfed.org/research/inflation/us-inflation/cpi.cfm