![]() ![]() The CPI measures price changes based on a representative sample of items (goods and services), so the published indexes differ from estimates based on actual records of all retail purchases by everyone in the index population. The first section examines the sampling error of the CPI, and the second section discusses possible sources of bias in the index. Bureau of Labor Statistics (BLS) has responded to questions about the accuracy and precision of the CPI. This issue of Beyond the Numbers looks at some different ways the U.S. But how accurate is it? If, for example, the CPI measures annual inflation as 2.3 percent, how confident can we be in that estimate? It directly affects the lives of Americans, so it must be as accurate as possible. The CPI is used extensively in many different ways, including three major uses: to adjust historical data, to escalate federal payments and tax brackets, and to adjust rents and wages. The Consumer Price Index (CPI) is an estimate of the average change in prices over time paid by urban consumers for a market basket of consumer goods and services in the United States. “ Price measurement in the United States: a decade after the Boskin Report,” Monthly Labor Review.“ Addressing misconceptions about the Consumer Price Index,” Monthly Labor Review.More articles and information related to Consumer Price Index data are available online at the following links: ![]()
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