The Bureau of Labor Statistics constructs the Consumer Price Index (CPI) in order to measure the price change over time of common consumer purchases. This information is then used for a variety of purposes, from helping lawmakers make economic decisions to estimating the purchasing power of the dollar over time.
The urban areas of the US are divided into 38 geographic areas, and all goods are divided into 211 item categories. These are combined to create 8018 item-area combinations. These combinations are then aggregated to create several larger geographic sizes, from major census regions to metropolitan areas, allowing comparison of consumer good prices from around the country. BLS also includes a similar collection of data which is seasonally adjusted to account for changes in popular items over the course of the year. The data is calculated and released on a monthly basis.
Each release of the CPI includes a variety of indices that analyze different sections of the economy. The CPI for Urban Consumers (CPI-U) is used to represent the urban population as a whole, using different weights for basic items than the more general CPI for Urban Wage Earners and Clerical Workers (CPI-W). Some goods and services are excluded from the CPI, namely stocks, bonds, real estate, and any purchases made as business expenses. While most insurance products are included, life insurance in particular is not. Any employer benefits are viewed as part of income, investment purchases such as antiques are excluded, and any monetary losses through gambling, fines, etc. are ignored. Each monthly index release displays the average change of product prices since the original collection in 1982. In addition, there is a percent comparison to both the previous month and previous year's indices.
At Ididio, we use the CPI-U non-seasonal information to adjust for inflation when providing time-series data in any case where the source of the data has not already accounted for inflation. The research series comes from the same data as the regular CPI-U, with annual values aggregated to a single file for convenience. We use the most recent CPI-U inflation adjustments to be provide the most current dollar equivalents possible.