Inflation Indicator
Consumer Price Index (CPI) — Year-over-Year
Updated 2026-03-12 · Monthly · Source: Bureau of Labor Statistics · Next release: 2026-04-10
Historical Trend
| Date | Value |
|---|---|
| 2026-03 | 2.8% |
| 2026-02 | 2.9% |
| 2026-01 | 3.0% |
| 2025-12 | 2.9% |
| 2025-11 | 2.7% |
| 2025-10 | 2.6% |
| 2025-09 | 2.4% |
| 2025-08 | 2.5% |
| 2025-07 | 2.9% |
What This Means for Business
Inflation at 2.8% remains above the Federal Reserve's 2% target but has moderated significantly from the 2022 peak of 9.1%. For executives, this means input costs are still rising faster than the Fed's comfort zone, but the pricing environment is stabilizing. Companies with strong pricing power can pass through cost increases; those in competitive markets face margin pressure. The Fed is unlikely to cut rates aggressively until CPI moves closer to 2%.
About CPI Inflation
The Consumer Price Index measures the average change over time in the prices paid by urban consumers for a basket of goods and services. The year-over-year change is the most commonly cited measure of inflation.
Methodology
The BLS tracks prices of approximately 80,000 items across 75 urban areas monthly. The CPI basket weights are based on the Consumer Expenditure Survey — housing (36%), transportation (16%), food (13%), and medical care (9%) are the largest components. Year-over-year change compares the current month's index to the same month one year prior.
Related Indicators
Frequently Asked Questions
What is the difference between CPI and core CPI?
Core CPI excludes volatile food and energy prices to show the underlying inflation trend. The Fed prefers core measures because food and energy prices fluctuate due to supply shocks (weather, geopolitics) rather than monetary policy. Core CPI typically runs 0.5-1.0 percentage points different from headline CPI.
How does inflation affect business strategy?
Inflation affects every aspect of business: input costs rise, wage demands increase, and consumers become more price-sensitive. Companies with pricing power (strong brands, essential products) can pass through costs. Those without pricing power face margin compression. Inflation also increases the hurdle rate for capital investments — projects must return more than the inflation rate to generate real value.
Why does the Fed target 2% inflation?
The Fed targets 2% because it provides a buffer against deflation (which is harder to fight) while being low enough that consumers and businesses don't need to factor significant price changes into daily decisions. Zero inflation risks deflation spirals; higher inflation erodes purchasing power and creates economic instability.