Consumer Price Index (CPI)

The Consumer Price Index (CPI) is a measure that examines the average change over time in the prices paid by consumers for a basket of goods and services, like food, clothing, and housing. It reflects inflation, showing how much prices have increased or decreased over time. When the CPI rises, it indicates that the cost of living is going up, affecting purchasing power. Governments and businesses use the CPI to make economic decisions, adjust salaries, and set interest rates, making it a crucial indicator of economic health.