On 10 November 2022, the US Consumer Price Index showed inflation easing to 7.7%, from 8.2% the month before. The S&P 500 rose 5.5% that day. Two months earlier, a CPI report sent it down 4.3%.
CPI is the most quoted measure of US inflation. Here is what it measures, how the government builds it each month and when it actually moves the stock market.
What is CPI? The Consumer Price Index (CPI) tracks the prices that people in US towns and cities pay for a fixed basket of goods and services. Its change over 12 months is the headline inflation rate.
The basket is weighted by what households spend. Housing costs alone are 35% of it.
Each month, the government collects prices in 75 urban areas, from about 22,000 shops and 6,000 homes.
On most CPI days, stocks move about as much as on any other day. In 2022, SPY (the S&P 500 exchange-traded fund, or ETF) moved 1.9% on an average CPI day, against 1.2% on other days.
How CPI is built
The index comes from the Bureau of Labor Statistics (BLS), part of the US Department of Labor. Every month, its staff price the same kinds of goods and services: food, rent, petrol, cars, clothes, doctors' visits and more.
In the BLS's own words, prices are collected each month "in 75 urban areas across the country from about 6,000 housing units and approximately 22,000 retail establishments."
Each item then gets a weight, based on how much households spend on it. Those weights come from a separate survey of household spending. They are now updated once a year.
The result is a single index number. It was set at 100 for the years 1982 to 1984. In August 2026, it stood at 334.98. Prices have more than tripled since the early 1980s.
Inflation is the change in that number. The index was 3.4% higher in August 2026 than a year earlier. We explain what drives that change in What Is Inflation?
How the inflation rate is calculated
The inflation rate compares the index with the same month a year earlier. In August 2025, the index stood at 323.98. In August 2026, it stood at 334.98, a rise of 11.00 points.
Divide the rise by the starting level: 11.00 ÷ 323.98 = about 0.034. So prices were 3.4% higher than a year earlier. That is the headline inflation rate.
The monthly rate compares the index with the month before. It uses a version of the index with regular seasonal swings taken out. In August 2026, that index rose 0.4% from July. If prices kept rising at that pace for 12 months, they would end the year about 4.9% higher.
What is in the basket
Source: US Bureau of Labor Statistics
The weights show what moves the index most:
Shelter is 35.3%. That is rent, plus what homeowners would pay to rent their own home. It is by far the biggest item.
Food is 13.5%, split between food at home (8.2%) and eating out (5.3%).
Medical care is 8.3%, energy 7.3% and new and used cars 6.5%.
Because shelter is so large, rents drive CPI more than anything else. A 1% rise in shelter costs adds about 0.35 points to inflation on its own.
Headline and core CPI
Headline CPI includes everything. Core CPI leaves out food and energy, because their prices swing with weather, harvests and oil markets.
In August 2026, the two told different stories. Headline inflation was 3.4%. Core was 2.4%. The gap came from energy, whose prices were 16.3% higher than a year earlier. Food was up 2.7% and shelter 3.0%.
We look at the gap between the two in Core vs Headline Inflation. The Federal Reserve sets its 2% target on a different measure, the PCE Price Index. We explain how it differs from CPI in What Is PCE Inflation?
When CPI moves the stock market
We checked every CPI release from June 2016 to September 2026, 120 in all. On each one, we measured how far SPY moved by the close of trading.
Source: US Bureau of Labor Statistics; YX Insights price data
Across the whole period, CPI days were only a little livelier than other days. SPY moved 0.79% on an average CPI day, against 0.73% on other days. In five of the nine full years from 2017 to 2025, CPI days were calmer than other days.
2022 stood out. Inflation was the highest in four decades. The Fed raised rates at every meeting from March. SPY moved 1.94% on an average CPI day that year, against 1.16% on other days. The biggest CPI-day move of the whole period came that autumn: up 5.5% on 10 November 2022. On 13 September 2022, SPY fell 4.3%.
So CPI moves the market most when inflation is the main thing the Fed is fighting.
How to read a CPI report
The BLS publishes CPI at 8:30 in the morning, Eastern time, about two weeks after the month ends. A few numbers carry most of the information:
The 12-month change, headline and core. This is the inflation rate quoted in the news.
The one-month change, seasonally adjusted. This shows whether inflation is speeding up or slowing down right now.
The big parts: shelter, energy and food. They explain most of any surprise.
Unlike payrolls or GDP, the unadjusted CPI is not revised later. The first number is the final one.
There is one gap in the record. The October 2025 report was never published, because of the US government shutdown.
CPI is a weighted basket of what households buy, priced every month. Learn which parts carry the weight. Each new report then becomes easier to read.
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