“The Consumer Price Index (CPI), the Federal Government’s principal measure of inflation at the retail level, is one of the most-watched economic statistics in the world. Its prominence means that it receives a high level of scrutiny and analysis. Some questions that have been asked recently by journalists and other commentators about the index are:

• Does the CPI include food and energy prices?
• Does the current method of measuring home prices in the CPI serve to lower the official inflation rate?
• When the costs of food rises, does the CPI assume that consumers switch to less expensive and less desired foods, such as substituting hamburger for steak?

The lead article in the August issue of Monthly Labor Review attempts to answer these and related questions.”