The Consumer Price Index (CPI) is a measure of the average change over time in the price paid by urban households for a bundle of typical goods and services. These services and goods are the ones that are commonly purchased and availed or consumed by people, including food, housing, and medical care. As Kavan Choksi Japan mentions, the U.S. Department of Labor, Bureau of Labor Statistics or BLS is responsible for producing the CPI. This index represents a statistical estimate of inflation, which is a general increase in prices and a decrease in the purchasing value of money.
Kavan Choksi Japan highlights how and when are CPI prices collected
Thousands of rental units, service establishments, doctor offices, retail stores and more across the United States are contacted by BLS data collectors to obtain information on the prices of the thousands of items that are used for tracking and measuring price changes in the CPI. These data collectors may physically visit these establishments, or collect information on call, through the web or via certain apps. They tend to record the prices of about 80,000 items each month. This data represents a scientifically selected sample of the prices paid by consumers for goods and services purchased.
During each visit or call, the data collector tends to collect price data on a particular service or good that was defined precisely in an earlier visit. In case the selected item is no longer available, or there have been changes in the quantity or quality of the good or service since the last time prices were collected, a new item tends to be chosen or the quality change in the current item is recorded.
Prices used for computing the CPI are collected during the entire month. This data is published on a monthly basis, with the index value representing an estimate of the price level for the month as a whole, instead of a particular date. There are certain prices that can move sharply within a month, like the prices of gasoline. Hence, it is vital to understand the timing of price collection. BLS data collectors ideally divide a month into three pricing periods to collect prices for CPI. Each of these periods corresponds to roughly the first ten days, second ten days, or third ten days of the month.
As per Kavan Choksi Japan, as any item is initiated into the CPI sample, its period pricing would be established. The item shall additionally be repriced during the same period, till it exits the sample after four years. Data collectors do have a certain degree of discretion within pricing periods, and are able to collect quotes at any time during the period. Hence, it is not necessary that data collection is spread perfectly evenly throughout the month. Nonetheless, almost equal amounts of data are collected in each pricing period. Prices of rent is an exception to this, as the prices in the rent sample are not divided by pricing periods. Specific rent quotes can be collected at any time during the month. Subsequent to their collection, price information is sent to the BLS national office, where specialists check the data for accuracy and consistency, and make adjustments or corrections as needed.