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Calculating Consumer Price Changes

 

RAND State Statistics provides Consumer Price Index data for urban consumers (CPI-U) and urban wage earners and clerical workers (CPI-W) for the U.S., states, and major urban areas. The CPI-U, published by the Bureau of Labor Statistics (BLS), is the most commonly-used inflation measure for a number of purposes, such as cost-of-living adjustments, real estate contracts, and other inflation-adjustment measures. CPI-U measures the average change in prices paid for a market basket of goods purchased for consumption for urban consumers (about 80% of the U.S. population). CPI-W measures average change in prices paid for a market basket of goods purchased for consumption for urban wage earners and clerical workers.

 

CPI-U and CPI-W are generally not adjusted for seasonal variations, although a number of series are adjusted.

 

RAND State Statistics publishes two types of CPI-U and CPI-W data: raw indexes and a moving annual percent change. CPI-U and CPI-W index data reflect original data provided by the BLS. Users can also estimate the inflation rate, in percent, for any time period using the index. For example, in the following example:

 

Time period Index
January 1997 155.7
January 1998 159.1

 

CPI-U = ((IndexJan. 1997-IndexJan. 1996))/IndexJan. 1996)*100 = (159.1/155.7) = 2.2%.

 

This one-year moving average is the method RAND State Statistics utilizes to publish CPI-U as a moving annual average. For example, the CPI-U figure for January 1997 reflects the change in CPI from January 1996-January 1997 as calculated above.