The Consumer Price Index (CPI) is the most publicized and widely
used measure of the general level of prices in the U.S. economy.
The CPI measures the average change over time in the prices paid by
urban consumers for a representative market basket of all consumer
goods and services.
The CPI for food is a component of the all-items CPI. While the
all-items CPI measures the price changes for all consumer goods and
services, including food, the CPI for food measures the changes in
the retail prices of food items only.
The CPI for food at home is a component of the full CPI and is
the principal indicator of changes in retail food prices.
Policymakers, both public and private, closely follow the CPI for
food consumed at home and its changes, which measure price
inflation for food items. The CPI for food consumed at home also
affects policy evaluation because the effects of many current and
proposed policies are evaluated based on CPI measures. To
contribute to the analysis of government and commercial decision
makers, ERS estimates the future direction of changes in the CPI
for all food, food at home, and food away from home (see Food Price
Forecasting the CPI for food has become increasingly important
due to the changing structure of food and agricultural economies
and the important signals the forecasts provide to farmers,
processors, wholesalers, consumers, and policymakers.
The food price level can be influenced by changes in costs
incurred by food system firms. Changes in input costs can translate
directly into changes in the CPI or may have little or no effect.
Researchers at ERS not only produce forecasts of the CPI but also
analyze the impact of economic factors on changes in the CPI.