The index measures price changes (as a percent change) from a predetermined reference date. To calculate the index, price changes are averaged with weights representing their importance in the spending of the particular group.

Prices are collected monthly from about 4,000 housing units and approximately 26,000 retail establishments across 87 urban areas. The CPIs are based on prices for food, clothing, shelter, and fuels transportation fares service fees (e.g., water and sewer service) and sales taxes. This particular index includes roughly 88 percent of the total population, accounting for wage earners, clerical workers, technical workers, self-employed, short-term workers, unemployed, retirees, and those not in the labor force. It can also represent the buying habits of urban consumers. The most common inflation metric is the percent change from one year ago. Percent changes in the price index measure the inflation rate between any two time periods. The Consumer Price Index for All Urban Consumers: All Items (CPIAUCSL) is a price index of a basket of goods and services paid by urban consumers.

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