CPI (Consumer Price Index) is a statistical measure used to track the changes in the average prices of goods and services that consumers buy over a specific period.
It is one of the most commonly used economic indicators and is often used to measure inflation. CPI is calculated and released by national statistical agencies, and it provides a snapshot of the cost of living for consumers in a particular country.
CPI tracks the prices of a basket of goods and services that represent the spending habits of typical consumers. The basket typically includes essential items such as food, housing, transportation, medical care, and clothing, among others. The prices of these items are tracked over time, and changes in the index are used to determine the rate of inflation or deflation.
The CPI is used by policymakers, businesses, and individuals to make informed decisions about various economic factors, such as wage adjustments, cost of living adjustments, social security benefits, and inflation targeting. It is also used to adjust the nominal values of economic data to account for inflation, providing a more accurate picture of economic performance.