August 21, 2002
The Bureau of Labor Statistics began publishing a new price index called the Chained Consumer Price Index for All Urban Consumers, effective with release of July data on August 16, 2002. Designated the C-CPI-U, the index supplements the existing indexes already produced by the BLS: the CPI for All Urban Consumers (CPI-U) and the CPI for Urban Wage Earners and Clerical Workers (CPI-W).
The C-CPI-U utilizes expenditure data in adjacent time periods in order to reflect the effect of any substitution that consumers make across item categories in response to changes in relative prices. The new measure is designed to be a closer approximation to a "cost-of-living" index than the CPI-U or CPI-W.
The use of expenditure data for both a base period and the current period in order to average price change across item categories distinguishes the C-CPI-U from the other measures, which use only a single expenditure base period to compute the price change over time.
Expenditure data required for the calculation of the C-CPI-U are available only with a time lag. Thus, the C-CPI-U is being issued first in preliminary form using the latest available expenditure data at release time and will be subject to two subsequent revisions. Accordingly, with release of the July data, "final" values of the C-CPI-U have been issued for the 12 months of 2000, "interim" values have been issued for the 12 months of 2001, and "initial" values have been issued for January-July of 2002.