What Is CPI Inflation?

Consumer Price Inflation (CPI) is a metric that examines the average change over time in the prices of a basket of consumer goods and services. The U.S. Bureau of Labor Statistics describes the CPI as reflecting the price changes of all goods and services purchased for consumption by urban households. This measurement of a basket of goods can be manipulated. CPI was measured differently in the past, with methodologies prior to 1980 producing higher inflation rates than today's official numbers. Some critics argue that today's CPI is too narrow, overlooking significant areas of the economy, such as housing and various assets.