What CPI Means: Consumer
When you hear the latest report on how much the ÛÏConsumer Price Index" has risen you probably figure itÛªs a visible measure of how your own cost of living keeps gobbling more income.</br></br>But the CPI, as itÛªs called, is not a cost-of-living index. It reflects price changes for 400 items monitored on a month-by-month basis.</br></br>The 400 products and services make up a market basket of things an average urban worker might buy. Food is a big item. Rents, clothing costs, transportation are all major items. But the "basketÛ contains more than bare necessities.</br></br>Prices are also checked for bowling fees, popular paperback books, textbooks, funeral services and prenatal care.</br></br>The reason this intricate monitor of price changes is not really a cost-of-living index is that a rise in certain prices does not necessarily mean a rise in the cost of living for everyone.