The Consumer Price Index (CPI) is one of the most widely used measures of inflation. It tracks the prices urban consumers pay for a representative "market basket" of goods and services. This “market basket” is developed using detailed spending information obtained from families and individuals about their actual purchases in more than 200 categories of products and services. The current price levels for the basket are then indexed to the price levels in the base period (1982-1984 for most categories), to produce the CPI. Increases in the index show inflation; economists often measure the year-over-year changes in the index to track the rate of inflation over time.

New England’s urban consumers are represented through consumers surveyed in the Boston metro area. Since the 1950’s, year over year change in Boston area prices has generally tracked U.S. price changes, with inflation tending to slow during periods of recession and to speed up during periods of economic expansion. Differences between the two prices indices are usually tied to changes in energy prices and due to the different composition of energy use in New England.