W
WASHINGTON, MO: UBC Local 1839
WASHINGTON, NJ: CWA Local 1025
WASHINGTON, PA: APWU Local 2153
WASHINGTON, PA: CWA Local 14836
WASHINGTON, PA: GMP Local 272
WASHINGTON, PA: GMP Local 337
WASHINGTON, PA: IBT Local 585
WASHINGTON, PA: UMWA Local 6754
WASHINGTON, PA: USW Local 142
WASHINGTON, PA: USW Local 146
WASHINGTON, PA: USW Local 544
WASHINGTON, PA: UWUA Local 537
WASHINGTONVILLE, NY: IATSE Local 311
WATAGA, IL: LIUNA Local 538
WATAGA, IL: TCU Local 6787
WATER VALLEY, MS: BLET Local 99
WATERBURY, CT: AFM Local 186
WATERBURY, CT: AFSCME Local 10
WATERBURY, CT: APWU Local 2921
WATERBURY, CT: IBEW Local 420
WATERBURY, CT: IBT Local 677
WATERBURY, CT: LIUNA Local 390
WATERBURY, CT: USW Local 895
WATERFORD, MI: NALC Local 320
WATERFORD, NY: CWA Local 81380
WATERLOO, IA: APWU Local 451
WATERLOO, IA: ATU Local 1192
WATERLOO, IA: CWA Local 7108
WATERLOO, IA: CWA Local 7175
WATERLOO, IA: GMP Local 459
WATERLOO, IA: IAM Local 1728
WATERLOO, IA: IBEW Local 288
WATERLOO, IA: IBT Local 650
WATERLOO, IA: NALC Local 512
WATERLOO, IA: NALC Local 719
WATERLOO, IA: PACE Local 709
WATERLOO, IA: PACE Local 827
WATERLOO, IA: UAW Local 1740
WATERLOO, IA: UAW Local 838
WATERLOO, IA: UBC Local 1835
 

How is the Consumer Price Index (CPI) used?

The Consumer Price Index affects nearly all Americans because of the many ways it is used. Three major uses are:

As an economic indicator: The CPI is the most widely used measure of inflation and is sometimes viewed as an indicator of the effectiveness of government economic policy. It provides information about price changes in the Nation's economy to government, business, labor, and other private citizens, and is used by them as a guide to making economic decisions. In addition, the President, Congress, and the Federal Reserve Board use trends in the CPI to aid in formulating fiscal and monetary policies.

As a deflator of other economic series: The CPI and its components are used to adjust other economic series for price changes and to translate these series into inflation-free dollars. Examples of series adjusted by the CPI include retail sales, hourly and weekly earnings, and components of the national income and product accounts. An interesting example of this is the use of the CPI as a deflator of the value of the consumer's dollar to find its purchasing power. The purchasing power of the consumer's dollar measures the change in the value to the consumer of goods and services that a dollar will buy at different dates. In other words, as prices increase, the purchasing power of the consumer's dollar declines.

As a means of adjusting dollar values: The CPI is often used to adjust consumers' income payments, for example, Social Security; to adjust income eligibility levels for government assistance; and to automatically provide cost-of-living wage adjustments to millions of American workers. The CPI affects the income of about 80 million persons as a result of statutory action: 48.4 million Social Security beneficiaries, about 19.8 million food stamp recipients, and about 4.2 million military and Federal Civil Service retirees and survivors. Changes in the CPI also affect the cost of lunches for 26.5 million children who eat lunch at school, while collective bargaining agreements that tie wages to the CPI cover over 2 million workers. Another example of how dollar values may be adjusted is the use of the CPI to adjust the Federal income tax structure. These adjustments prevent inflation-induced increases in tax rates, an effect called "bracket creep".

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