What an inflation number actually measures
A price index tracks a representative basket over time. Its change is not the same as every household’s change in costs.
What is the Consumer Price Index?
The CPI measures average price changes for a representative basket of consumer goods and services. Different versions cover different populations; CPI-U covers urban consumers.
Does lower inflation mean lower prices?
A smaller positive percentage change means the index rose more slowly. It does not mean the index fell. Check both the index level and the change over the stated period.
Why can two inflation figures differ?
A monthly change and a year-over-year change compare different periods. An index excluding food and energy covers a different basket. Seasonal adjustment removes recurring seasonal patterns to help interpret short-term movement.
What should I check in an inflation headline?
Look for the index, population, comparison period and seasonal-adjustment label. Your own spending mix can differ from the representative basket. Use the original release for the current observation, and compare like with like.
Read the official explanation
Source for this background guide: U.S. Bureau of Labor Statistics ↗. This guide explains definitions and interpretation; it does not provide a current data release.
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