What is CPI (Consumer Price Index)?




The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.


It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.


Changes in the CPI are used to assess price changes associated with the cost of living.


The CPI is one of the most frequently used statistics for identifying periods of inflation or deflation.


The Consumer Price Index measures the average change in prices over time that consumers pay for a basket of goods and services.


CPI is the most widely used measure of inflation and, by proxy, of the effectiveness of the government’s economic policy.