inflation indexes

Inflation indexes measure how the overall prices of goods and services in an economy change over time, reflecting the cost of living. They track a representative basket of items—like food, transportation, and housing—and compare current prices to past periods. Common indexes include the Consumer Price Index (CPI) and the Producer Price Index (PPI). When these indexes rise, it indicates inflation, meaning prices are generally increasing, which can affect purchasing power. Policymakers and businesses use these indexes to make informed decisions about monetary policy, wages, and planning for future costs.