Consumer Price Index

The Consumer Price Index (CPI) is an economic measure that tracks changes in the prices of a basket of goods and services typically purchased by households. It reflects inflation or deflation by comparing current prices to those from a previous time. If the CPI rises, it indicates that prices are generally increasing, meaning purchasing power is decreasing. Conversely, a falling CPI suggests lower prices. Policymakers, economists, and businesses use CPI to gauge economic health and make decisions related to monetary policy, wages, and cost of living adjustments.