CPI-common is based on trends in price changes that are similar across the various categories in the CPI basket, rather than focusing on increases to specific items, such as the prices of gasoline or fruit.
It uses a statistical procedure called a factor model to detect these common variations, which helps filter out price movements that might be caused by factors specific to certain components.13 Such common movements in prices are more likely to reflect underlying inflationary pressures related to aggregate demand and supply forces than sector-specific disturbances.