Cpi Meaning

Consumer Price Index (CPI)

Understanding the Consumer Price Index

Definition

The Consumer Price Index (CPI) is an economic measure that gauges the average change in prices of a representative basket of goods and services purchased by households.

Purpose

The CPI serves as an indicator of inflation, helping track the change in the cost of living for consumers.

Methodology

The CPI is calculated by comparing the prices of a fixed basket of goods and services to a base period. It represents the weighted average of price changes for various items, including food, housing, transportation, and healthcare.