Final answer:
The U.S. Bureau of Labor Statistics is the federal department responsible for publishing the Consumer Price Index, a key measure of inflation reflecting the change in the cost of a fixed basket of goods and services. The BLS ensures the accuracy and relevancy of CPI by conducting surveys and making adjustments for product changes. The CPI is distinct from other indexes like PPI and the GDP deflator, which measure prices at different points in the economy.
Step-by-step explanation:
Which Department Publishes the Consumer Price Index
The federal government department responsible for publishing the Consumer Price Index (CPI) is the U.S. Bureau of Labor Statistics (BLS). The CPI is a measure of inflation that reflects the yearly change in the cost of a fixed basket of goods and services purchased by an average family of four. This department calculates CPI by taking into account the prices of these goods and services, which provides insight into the cost of living and the level of inflation in the economy.
Methods to Avoid Biases in CPI
The Bureau of Labor Statistics actively seeks to avoid biases in the CPI by conducting the Consumer Expenditure Survey to ensure the basket reflects the actual spending patterns of consumers. They select the basket based on 200 item categories and use a base period of 1982-1984 for their calculations. Additionally, they make adjustments for changes in product quality and introductions of new products to provide a more accurate reflection of the cost of living.
Differentiating CPI from Other Indexes
It's important to distinguish the Consumer Price Index from other measures such as the Producer Price Index (PPI), the International Price Index, the Employment Cost Index, and the GDP deflator. While CPI measures the average change over time in the prices paid by consumers for a market basket of consumer goods and services, PPI measures the average change over time in the selling prices received by domestic producers for their output, and the GDP deflator reflects the price level of all new, domestically produced, final goods and services in an economy.