Chained Consumer Price Index (C-CPI-U)

The Chained Consumer Price Index is an alternative measure of consumer inflation published by the U.S. Bureau of Labor Statistics that continuously updates its basket weights each month rather than holding them fixed, so it captures the substitution effect of consumers buying relatively more of a good whose price has risen more slowly. Because it accounts for this substitution, the chained index typically registers a lower rate of inflation than the standard Consumer Price Index, by roughly a quarter to three tenths of a percentage point. The distinction matters for government policy because cost of living adjustments to benefit programs and certain tax provisions are indexed to CPI measures, so the choice of index changes the size of those adjustments over time.