What is Consumer Price Index (CPI)?
The Consumer Price Index (CPI) is a measure of inflation that tracks the price changes of a basket of goods and services commonly purchased by households.
It is calculated by taking the weighted average of the price changes of the basket of goods and services over time.
The CPI is widely used by policymakers, economists, and investors as a key indicator of inflation and price stability.
The Bureau of Labor Statistics (BLS) in the United States is responsible for collecting and publishing CPI data on a monthly basis.
The CPI is used to adjust government programs, including Social Security benefits, tax brackets, and other payments, for inflation.
CPI data is also used by businesses and investors to make decisions about pricing, investment, and other financial matters.
There are different types of CPI, including the CPI for all urban consumers (CPI-U), which tracks price changes for goods and services purchased by households in urban areas.
The CPI also measures price changes for specific categories of goods and services, such as food, energy, housing, and transportation.