Reference

Glossary of inflation and price-index terms.

The vocabulary that turns up in central-bank communications, statistical-agency releases, and the financial press. Each entry is short and links to longer treatment where one exists.

Base year: The year (or period) for which the index is set to a reference value (typically 100). Choice of base year is a normalisation; it does not affect calculated inflation rates between two other years.
BLS: Bureau of Labor Statistics. The US federal agency that publishes CPI, employment data, and producer-price indices.
Chain weighting: An index methodology where weights update each period to reflect realised consumer spending substitution. Produces a more accurate measure of the realised cost of living. The C-CPI-U is chain-weighted; the headline CPI-U is not.
COLA: Cost-of-Living Adjustment. An automatic increase to a benefit, salary, or contractual payment indexed to inflation. US Social Security uses CPI-W (a sub-index focused on urban wage earners) for its annual COLA.
Core inflation: CPI excluding food and energy. See the core vs. headline page.
CPI: Consumer Price Index. The most-cited measure of consumer inflation. Published monthly by national statistical agencies.
CPI-U / CPI-W / C-CPI-U: Three US CPI variants. CPI-U covers all urban consumers. CPI-W covers urban wage earners (used for Social Security COLA). C-CPI-U is chain-weighted.
Deflation: A sustained decrease in the general price level (negative inflation). Particularly hard for monetary policy to correct because nominal interest rates cannot meaningfully go below zero.
Disinflation: A decrease in the inflation rate (e.g., from 6 % to 3 %) while still positive. Distinct from deflation.
Eurostat: The European Commission's statistical office. Publishes the Harmonised Index of Consumer Prices (HICP) for the EU and member states.
Headline inflation: CPI including food and energy — the figure most commonly quoted in news headlines.
Hedonic adjustment: The methodology used to separate price change from quality change in CPI. See the hedonic page.
HICP: Harmonised Index of Consumer Prices. The Eurostat-coordinated CPI used by EU member states to ensure cross-border comparability for ECB monetary policy.
Inflation: A sustained increase in the general price level. Reported as a percentage change in a price index over a stated period (typically year-over-year).
Laspeyres index: A fixed-basket price index using base-period weights. The original CPI methodology. Overstates the realised cost of living because it does not capture substitution; modern CPI methodologies partially correct this.
Owner-equivalent rent (OER): The implicit rental value that homeowners would pay if they rented their own homes. The largest single component of US CPI shelter, accounting for ~25% of the headline CPI weight.
PCE: Personal Consumption Expenditures price index. An alternative US inflation measure published by the BEA, preferred by the Federal Reserve for its 2 % inflation target. Differs from CPI in scope, weights, and methodology.
Real value: A nominal value adjusted for inflation. The output of this site's calculator. Equivalent to “today's dollars” or “constant purchasing power.”
Shelter: The CPI category covering rent and owner-equivalent rent. The single largest contributor to headline US CPI.
Shrinkflation: The practice of reducing package size while holding nominal price stable. Captured by CPI methodology as a per-unit price increase. See the shrinkflation page.
Stagflation: A period of high inflation, high unemployment, and stagnant economic growth. Particularly difficult for monetary policy because the standard tools work against one objective when applied to the other.
Statistics Canada: Statistics Canada / Statistique Canada. The Canadian federal statistical agency. Publishes the Canadian CPI.
Trimmed mean CPI: An alternative to core CPI that excludes the highest- and lowest-changing components in each month. Less arbitrary than the food/energy exclusion. Published by the Cleveland Fed and the Bank of Canada.