What Is CPI (Consumer Price Index)?
What is CPI? The Consumer Price Index measures how much the prices US households pay have changed. When the news says inflation is 3%, it nearly always means the CPI is 3% higher than a year earlier.
The Bureau of Labor Statistics (BLS) publishes it once a month at 8:30 a.m. New York time, usually somewhere between the 10th and the 14th. The day moves, so take it from the BLS release schedule or When is the next US CPI report?
What is in the basket
Every month the BLS records the prices of about 80,000 items (BLS CPI questions and answers). It sorts them into more than 200 categories, in eight major groups: food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services.
The groups do not count equally. Each item weighs as much as households spend on it, and that makes housing the giant. In the BLS weights for December 2025, shelter was 35.6% of the whole index. Petrol was 2.9% (BLS relative importance).
Most of that shelter weight, 26.2 points, is owners’ equivalent rent: what a homeowner would pay to rent the home they live in. Nobody actually pays that bill, and it is still the largest single item in the CPI. In June 2023 shelter accounted for over 70% of the index’s monthly rise (BLS, June 2023 CPI). So when you wonder why US inflation is slow to come down after petrol gets cheaper, look at rents first.
Headline and core
You will hear about two versions. Headline CPI, “all items”, is the whole basket. Core CPI, “all items less food and energy”, leaves out the two groups whose prices jump around most.
Energy is only about 6% of the basket, yet it can drag the headline a long way on its own: in June 2022, with energy up 41.6% on the year, headline CPI reached 9.1%, the largest 12-month rise since 1981, while core was 5.9% (BLS, June 2022 CPI). That June and the one after it are taken apart in What Is Core Inflation?
The figure in the news and on the calendar is the CPI-U, for urban consumers, who make up over 90% of the US population. You may also run into the CPI-W, for the households of wage earners and clerical workers, about 30%.
A month and a year
The release gives each measure two ways, the change over the last month and over the last twelve, so headline and core make four numbers. Which to read first, and against what, is in How to Trade CPI Inflation in Forex.
The monthly figures come with one decimal, and that decimal carries a lot. Kept up for a year, 0.4% a month is close to 5% inflation; 0.3% a month is near 3.7%. One tenth of a point is the difference between two quite different stories for the Fed.
And that decimal is rounded. From February 2007 to September 2026, core CPI was first published as up 0.3% on the month 39 times. Worked out from the index the BLS published on the day, those months ran from 0.251% to 0.349%: kept up for a year, anything from 3.1% to 4.3%. In 11 of the 39 the unrounded change sat within 0.02 of the line where it would have printed 0.2% or 0.4%.
That count uses each month as first published, from the St. Louis Fed’s archive of past versions of the seasonally adjusted core index (ALFRED), rounded the way the BLS rounds; later revisions to seasonal factors are left out. The BLS publishes its indexes to three decimals, so you can work out the unrounded change yourself.
Why CPI moves currencies
A central bank sets interest rates to keep inflation near its target, and a currency tends to follow where markets expect those rates to go. CPI above the forecast makes higher rates, or fewer cuts, more likely, and that tends to support the currency. Below the forecast works the other way.
What moves the price is the gap between the result and the forecast. A 3% reading is old news if everybody expected 3%. Each month’s forecast, and how the result compared, is on US Inflation Rate (CPI).
The Fed’s own 2% goal is written on a different index, PCE. CPI still gets the attention, because it lands about two weeks earlier and is the first full read on the month’s prices.
The other major economies publish their own versions: Euro Area Inflation Rate (HICP), UK Inflation Rate (CPI), Japan Inflation Rate (CPI), Canada Inflation Rate (CPI) and Australia Inflation Rate (CPI).
When there is no CPI
It can go missing. The BLS published no CPI for October 2025: a lapse in federal funding suspended most of the work from 1 October to 12 November, and price collection only restarted on 14 November (BLS shutdown FAQ).
The hole shows up again a year later. The BLS has said it will not publish 12-month changes for October 2026 for the indexes that have no October 2025 value, so for those the October 2026 report gives only the monthly change.