Every month, statisticians fan out across cities to check the price of bread, rent, gasoline, and hundreds of other items. They compile the results into the Consumer Price Index, the most widely used gauge of inflation. When the CPI rises 3 percent over a year, it means the typical basket of goods and services costs 3 percent more.

The basket matters. It is weighted by what households actually buy, so housing and food carry more weight than movie tickets. Over time, the basket changes as spending habits shift. Streaming services replaced video rentals. Smartphones replaced landlines. Statisticians adjust to keep the index relevant.

CPI numbers move markets. A higher-than-expected reading can send stock prices down and bond yields up, because investors expect central banks to raise interest rates. A lower reading does the opposite. Politicians cite the index constantly, sometimes accurately and sometimes not. Social Security checks in the United States are indexed to CPI, so the number directly affects millions of retirees.

What CPI tracks

• Food and beverages
• Housing and rent
• Transportation and fuel
• Medical care
• Education and communication