Consumer Price Index
Definition
Consumer price index measures changes in how much we can buy with a certain amount of money.
Why This Matters
The CPI is a widely used indicator of changes in consumer prices and the rate of inflation.
Measurement and Limitations
CPI is calculated by comparing the cost of a fixed basket about 600 of goods and services purchased by consumers. As the basket contains a fixed set of goods and services, the index reflects only price change. Data is collected directly from survey respondents (who are required to respond), administrative files, other Statistics Canada surveys, and other sources.
The goods and services that make up the Consumer Price Index (CPI) are organized according to a hierarchical structure with the “all-items CPI” as the top level. Eight major components of goods and services make up the “all-items CPI”. They are: “food”, “shelter”, “household operations, furnishings and equipment”, “clothing and footwear”, “transportation”, “health and personal care”, “recreation, education and reading”, and “alcoholic beverages, tobacco products and recreational cannabis”. These eight components are broken down into a varying number of sub-groups which are in turn broken down into other sub-groups. Indents are used to identify the components that make up each level of aggregation. For example, the eight major components appear with one indent relative to the “all-items CPI” to show that they are combined to obtain the “all-items CPI”. NOTE: Some items are recombined outside the main structure of the CPI to obtain special aggregates such as “all-items excluding food and energy”, “energy”, “goods”, “services”, or “fresh fruit and vegetables”. They are listed after the components of the main structure of the CPI following the last major component entitled “alcoholic beverages, tobacco products and recreational cannabis”.
According to Statistics Canada: Generally, the factors affecting the quality of the CPI include: (i) The size and composition of the price samples of goods and services and outlets; (ii) The accuracy of the expenditure estimates used to assign weights; (iii) The frequency and speed of updating of the contents and weights of the CPI basket; (iv) The effectiveness of error detection and correction, and imputation methods for missing data; and (v) The application of appropriate methods of adjusting for quality change of goods and services in the CPI sample.
Data is updated on Peg as it becomes available from the data providers.
Data Source
Statistics Canada. Table 18-10-0005-01 Consumer Price Index, annual average, not seasonally adjusted
References
Statistics Canada. Table 18-10-0005-01 Consumer Price Index, annual average, not seasonally adjusted
Consumer Price Index in the Sustainable Development Goals
Click on the SDG to reveal more information
1. End poverty in all its forms everywhere
Extreme poverty rates have been cut by more than half since 1990. While this is a remarkable achievement, one in five people in developing regions still live on less than $1.90 a day, and there are millions more who make little more than this daily amount, plus many people risk slipping back into poverty.
Poverty is more than the lack of income and resources to ensure a sustainable livelihood. Its manifestations include hunger and malnutrition, limited access to education and other basic services, social discrimination and exclusion as well as the lack of participation in decision-making. Economic growth must be inclusive to provide sustainable jobs and promote equality.
Related Consumer Price Index Targets
By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions
8. Promote inclusive and sustainable economic growth, employment and decent work for all
Roughly half the world’s population still lives on the equivalent of about US$2 a day. And in too many places, having a job doesn’t guarantee the ability to escape from poverty. This slow and uneven progress requires us to rethink and retool our economic and social policies aimed at eradicating poverty.
A continued lack of decent work opportunities, insufficient investments and under-consumption lead to an erosion of the basic social contract underlying democratic societies: that all must share in progress. The creation of quality jobs will remain a major challenge for almost all economies well beyond 2015.
Sustainable economic growth will require societies to create the conditions that allow people to have quality jobs that stimulate the economy while not harming the environment. Job opportunities and decent working conditions are also required for the whole working age population.
Related Consumer Price Index Targets
Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries