The Consumer Price Index (CPI) is calculated by the Bureau of Labor Statistics (BLS) from about 80,000 prices of goods and services collected each month, plus about 8,000 rent quotes, in 75 urban areas; each item's price change is weighted by its share of consumer spending [4][5][6]. Shelter carries the largest weight, 35.6% of the index, against 13.7% for food and 6.4% for energy, as of December 2025 [3]. "Core" CPI removes food and energy. As of August 2026, the latest month in DataPorium's data, headline CPI was up 3.4% from a year earlier and core CPI 2.4%, a gap driven by a 27.4% rise in gasoline prices [1][2].
What does the CPI measure?
The CPI measures the average change over time in the prices urban consumers pay for a fixed basket of goods and services. The main index, the CPI for All Urban Consumers (CPI-U), covers about 93% of the US population [4]. It is not a full cost-of-living index: BLS notes that it differs "in important ways" from one, for example because it does not capture every change in how people spend [6].
The index is set to 100 for the 1982-84 average. In August 2026 the CPI-U stood at 334.980, which means the same basket cost about 3.35 times its 1982-84 price [2]. The headline inflation rate is the percentage change in that index over 12 months.
How does BLS collect the prices?
The sample is built in stages. BLS first selects urban areas, then stores and service providers in those areas, then specific items within each store [6].
- Places: 75 primary sampling units (urban areas), grouped into 32 index areas [4].
- Items: 243 item categories, called strata, from apples to airline fares. Crossing 32 areas with 243 strata gives 7,776 basic indexes, the building blocks of the national CPI [4].
- Prices: about 80,000 item prices each month, according to BLS's frequently asked questions, collected by visits and calls to thousands of stores, service providers and doctors' offices [6]. A separate Housing Survey collects about 8,000 rental unit quotes each month [5].
The sample has shrunk recently. BLS suspended collection entirely in Lincoln, Nebraska, and Provo, Utah, in April 2025 and in Buffalo, New York, in June 2025, and reduced collection elsewhere to match its resources [10]. Fewer quotes make local and item-level indexes noisier, even when the national average changes little.
How are the CPI weights set?
Each category's weight comes from the Consumer Expenditure Surveys, which ask households what they spend money on. BLS updates the weights every year [5]. The share of the index each category holds at a point in time is published as its "relative importance." The December 2025 table, based on 2024 spending, is the latest [3].
| Category | Weight, December 2025 (% of CPI-U) | 12-month change, August 2026 |
|---|---|---|
| All items | 100.0 | 3.4% |
| Shelter | 35.6 | 3.0% |
| Owners' equivalent rent | 26.2 | 3.1% |
| Rent of primary residence | 7.8 | 2.7% |
| Food | 13.7 | 2.7% |
| Medical care services | 6.9 | 2.5% |
| Energy | 6.4 | 16.3% |
| Gasoline | 2.9 | 27.4% |
| Electricity | 2.5 | 3.8% |
| New vehicles | 3.8 | 0.6% |
| Used cars and trucks | 2.8 | -2.3% |
| Motor vehicle insurance | 2.8 | -5.1% |
| Airline fares | 0.9 | 23.4% |
| Core (all items less food and energy) | 79.9 | 2.4% |
Source: BLS relative importance table, December 2025 [3]; DataPorium Inflation and BLS, 12-month changes not seasonally adjusted, August 2026 [1][2].
The weights explain why some price spikes matter more than others. Airline fares rose 23.4% in the year to August 2026, but at 0.9% of the basket they added only about 0.2 percentage points to headline inflation. Shelter rose a much smaller 3.0%, yet at 35.6% of the basket it contributed roughly 1.1 points [1][3]. A rough check with the same weights: core at 79.9% times 2.4%, plus food at 13.7% times 2.7%, plus energy at 6.4% times 16.3% gives about 3.3%, close to the published 3.4% (weights drift as relative prices change, so the arithmetic is approximate) [1][3].
What is owners' equivalent rent?
Owners' equivalent rent (OER) is the CPI's estimate of what homeowners would pay to rent their own homes. At 26.2% of the index, it is the largest single item [3]. BLS treats an owned home as an investment, so house prices and mortgage interest are not in the CPI; instead it measures the cost of the shelter the home provides [7].
Two different sources feed OER. The weight comes from a survey question to homeowners: "If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?" The price change comes from rents on comparable rental units; owner-occupied homes are not priced at all [7]. The rental sample is split into six panels, and each unit is priced every six months [7]. That design is why shelter inflation moves slowly: as of August 2026, OER was up 3.1% from a year earlier, down from 4.0% in August 2025 [1].
Why is CPI seasonally adjusted?
Many prices follow a calendar: gasoline usually rises in spring, clothing falls with end-of-season sales. Seasonal adjustment removes those regular patterns so a monthly change reflects the trend, not the calendar [6]. The 12-month rates (3.4% headline, 2.4% core) use unadjusted data, because a full year contains every season once; the 1-month rates use adjusted data [1].
The adjustment can be large for volatile items. In August 2026 gasoline rose 3.9% after seasonal adjustment but 2.5% before it, and that adjusted rise accounted for over one third of the 0.4% monthly increase in the all-items index [2]. BLS recalculates the seasonal factors each February; the factors introduced on February 13, 2026, revised adjusted data from January 2021 through December 2025 [8].
What is core inflation, and why does the Fed watch it?
Core inflation is the CPI excluding food and energy, which together make up about 20% of the basket [3]. Those prices swing with weather, wars and harvests. The Federal Reserve Bank of St. Louis explains that monetary policy works with "long and variable lags," on average over a couple of years, so the Fed needs a measure that reflects the underlying trend rather than short-term swings it cannot offset [12].
The Fed's 2% goal is defined with a different index, the personal consumption expenditures (PCE) price index from the Commerce Department, not the CPI [11]. Core PCE is its main focus [12], but core CPI is published earlier in the month and is closely watched for that reason. As of October 13, 2026, the Fed's target range was 3.75% to 4.00%, after a 0.25-point increase at its September 15-16, 2026 meeting [13].
Why were headline and core so far apart in 2026?
Energy. As of August 2026, energy prices were up 16.3% from a year earlier and gasoline 27.4%, while core prices rose 2.4%, down from 3.1% in August 2025 [1]. Gasoline had been 7.5% cheaper than a year earlier in January 2026; its 12-month change jumped to 40.5% by May 2026 [1]. The same split appeared in July 2008, when headline CPI rose 5.6% and core 2.5% as gasoline climbed 37.9% [14].
The CPI weights about 80,000 monthly prices by what households spend; shelter is 35.6% of the basket, and core inflation strips out the 20% that is food and energy.
What happened to the October 2025 CPI?
There is no CPI for October 2025. BLS did not collect CPI prices from October 1 through November 12, 2025, during the federal government shutdown, which affected the October and November 2025 indexes [9]. DataPorium's series has no values for October 2025, and some 1-month changes next to that month are blank [1].
The gap reached into 2026. Because each rental unit is priced every six months, the missing October 2025 rents also affected the April 2026 rent and OER indexes, according to BLS [9]. The Consumer Expenditure survey that sets future weights also missed October and November 2025 [9].
The newest month, along with each category's history, appears on DataPorium's inflation page [1].
Frequently asked questions
How is the CPI calculated?
BLS collects about 80,000 prices a month in 75 urban areas, computes 7,776 basic indexes by area and item, and combines them using spending weights from the Consumer Expenditure Surveys [4][5][6]. The headline rate is the 12-month change in the resulting index: 3.4% in August 2026 [2].
What is the difference between headline and core CPI?
Headline CPI includes everything; core CPI excludes food and energy, about 20% of the basket [3]. In August 2026 headline was 3.4% and core 2.4% [1].
What is the biggest component of the CPI?
Shelter, at 35.6% of the CPI-U as of December 2025. Most of that is owners' equivalent rent, at 26.2% [3].
Why is there no October 2025 CPI?
BLS did not collect prices from October 1 to November 12, 2025, during the federal government shutdown, so no October 2025 index exists [9].
Sources & References
- [1] DataPorium Inflation (consumer prices by category, August 2026)
- [2] U.S. Bureau of Labor Statistics, Consumer Price Index - August 2026 (September 11, 2026)
- [3] U.S. Bureau of Labor Statistics, Relative importance of components in the Consumer Price Indexes, December 2025 (accessed October 13, 2026)
- [4] U.S. Bureau of Labor Statistics, Handbook of Methods, Consumer Price Index: Design (accessed October 13, 2026)
- [5] U.S. Bureau of Labor Statistics, Handbook of Methods, Consumer Price Index: Data Sources (accessed October 13, 2026)
- [6] U.S. Bureau of Labor Statistics, Consumer Price Index Frequently Asked Questions (accessed October 13, 2026)
- [7] U.S. Bureau of Labor Statistics, How the CPI measures price change of Owners' equivalent rent of primary residence and Rent of primary residence (February 13, 2026)
- [8] U.S. Bureau of Labor Statistics, Updated seasonal factors introduced February 13, 2026
- [9] U.S. Bureau of Labor Statistics, 2025 federal government shutdown impact on the CPI (September 15, 2026)
- [10] U.S. Bureau of Labor Statistics, Notice of CPI collection reductions (June 16, 2025)
- [11] Board of Governors of the Federal Reserve System, Why does the Federal Reserve aim for inflation of 2 percent over the longer run? (August 22, 2025)
- [12] Federal Reserve Bank of St. Louis, FRED Blog, Why exclude food and energy from inflation measures? (June 4, 2026)
- [13] DataPorium Interest Rates (Federal Reserve decisions, 2026)
- [14] U.S. Bureau of Labor Statistics, Consumer Price Index - July 2008 (August 14, 2008)
