In 2009, for the first time in 54 years, the annual average Consumer Price Index dropped from year to year. From 2008 to 2009, the CPI dropped 0.766 index points, for a percentage change of -0.4. Consequently, there was no consumer inflation as measured by the CPI, but instead a slight drop in consumer prices.

The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is a widely used measure of inflation of living expenses as experienced by consumers in their day-to-day lives.

The CPI for all urban consumers represents about 87 percent of the total U.S. population. It is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed, and retired people, as well as urban wage earners and clerical workers. Not included in the CPI are the spending patterns of people living in rural nonmetropolitan areas, farm families, people in the Armed Forces, and those in institutions, such as prisons and mental hospitals.

As we look back over the history of the CPI, there have only been 15 years since 1913 when the annual average CPI decreased from one year to another. Most of those years were during the great depression, when the CPI decreased seven consecutive years from 1927 through 1933.

To learn more about the Consumer Price Index, click here for the U.S. Bureau of Labor Statistics website.


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