Housing in U.S. city average, all urban consumers, chained, not seasonally adjusted

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) was introduced with the release of July data in August 2002. It supplements the existing Consumer Price Indexes 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 employs a Tornqvist formula and 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 present measures.

The use of expenditure data for both a base period and the current period distinguishes the C-CPI-U from the existing CPI measures, which use only a single expenditure base period to compute price change over time. In 1999, the BLS introduced a geometric mean estimator for averaging prices within most of the index's item categories to approximate consumers' responses to changes in relative prices within item categories. This geometric mean estimator is used in the C-CPI-U in the same item categories in which it is used in the CPI-U and CPI-W.

Expenditure data required for the calculation of the C-CPI-U are available only with a time lag. Thus, the C-CPI-U is issued first in preliminary form and is subject to two subsequent revisions: from "initial" to "interim" and from "interim" to "final." Final values become available when the monthly expenditure data from the relevant calendar year become available, approximately two years after original publication. The C-CPI-U index revisions are expected to be small, but in principle each monthly index could be revised from its previously published level.

The C-CPI-U will be issued for national averages only and will not be seasonally adjusted. It employs a December 1999=100 reference base. Data for periods prior to December 1999 will not be calculated.