Consumer Price Index: More Frequent Updating of Market Basket Expenditure Weights Is Needed
GGD/OCE-98-2
Published: Oct 09, 1997. Publicly Released: Nov 04, 1997.
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Highlights
Pursuant to a congressional request, GAO reviewed the Consumer Price Index (CPI) market basket expenditure weights, focusing on: (1) the views of individuals who were knowledgeable of the CPI on updating the weights between major revisions to the CPI and the practices followed by other industrialized countries in updating their consumer price indexes; (2) the additional cost to the Bureau of Labor Statistics (BLS) to update the weights on a 5-year cycle; (3) the dollar effect on the federal budget if the weights were updated on a 5-year cycle; and (4) BLS' reasons as to why updates of the weights have only occurred during major revisions to the CPI, which have been about every 10 years.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Bureau of Labor Statistics | As long as a fixed market basket CPI is published, the Commissioner of BLS should update the expenditure weights of the CPI's market basket of goods and services more frequently than every 10 years to make it more timely in its representation of consumer expenditures. |
The Bureau of Labor Statistics (BLS) announced on December 18, 1998 that it will update the expenditure weights every 2 years, beginning with the release of the CPI in January 2002.
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Budget deficitCost of livingEconomic analysisEconomic indicatorsEconomic policiesForeign governmentsFuture budget projectionsInflationPrice indexesStatistical data