Income, Benefits and Inflation Data in the Consumer Expenditure Survey and Consumer Price Indexes
About
The U.S. Bureau of Labor Statistics (BLS) issues annual income and expenditures data from its Consumer Expenditures (CEX) Surveys and its Consumer Price Index (CPI) datasets.
The Consumer Expenditure Surveys (CEX)
The CEX is the only Federal survey to provide information on the complete range of consumers' expenditures and incomes, as well as the characteristics of those consumers.
It is used by:
- economic policymakers examining the impact of policy changes on economic groups
- the Census Bureau as the source of thresholds for the Supplemental Poverty Measure
- businesses and academic researchers studying consumers' spending habits and trends
- other Federal agencies for planning and analysis, and
- perhaps most importantly, to regularly revise the CPI market basket of goods and services and their relative importance.
The CE data program consists of two surveys, the Interview Survey and the Diary Survey. These surveys provide information on the buying habits of American consumers, including data on their expenditures, income, and consumer unit (families and single consumers) characteristics.
To collect data, including demographics, the CEX uses the Public Use Microdata (PUMD) files to make adjustments for information that is missing. This allows researchers to analyze expenditures, income, and demographic trends beyond what the published tables show.
The survey data are collected for BLS by the U.S. Census Bureau.
The Consumer Price Indexes (CPI)
Knowing the cost of goods and services consumers are buying is critical information in determining the strength of the economy and its trends. The BLS conducts the CEX to gather data needed for the calculation of the Consumer Price Index (CPI), a key measure of inflation.
Indexes are available for consumer goods expenditures and for special categories, such as services. Indexes are available for two population groups: a CPI for All Urban Consumers (CPI-U) and a CPI for Urban Wage Earners and Clerical Workers (CPI-W).
- The CPI-U includes expenditures by urban wage earners, the self-employed, short-term workers, the unemployed, retirees and others not in the labor force.
- The CPI-W includes only expenditures by those in hourly wage earning or clerical jobs.
The CPI represents changes in prices of all goods and services purchased for consumption by urban households. As an economic indicator, the CPI data shows the effectiveness of government policy. Business executives, labor leaders and other private citizens use the index as a guide in making economic decisions.
The CPI is often used to adjust worker and consumer benefits and income payments (for example, Social Security, food stamps and school lunch programs), to adjust income eligibility levels for government assistance, and to automatically provide cost-of-living wage adjustments to millions of American workers.
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- Posted by: Damon Jones
- Posted in: LMI Central