Consumer Price Index (CPI): A Comprehensive Guide
What is the CPI?
The Consumer Price Index (CPI) is a measure of the change in the average price of a basket of goods and services purchased by urban consumers. It is a key indicator of inflation or deflation in an economy.
How is the CPI Calculated?
The CPI is calculated by the Bureau of Labor Statistics (BLS) by tracking the prices of a representative sample of goods and services purchased by urban consumers, including items like food, housing, transportation, and healthcare.
Uses of the CPI
The CPI is a valuable tool for policymakers, businesses, and consumers as it provides insights into:
* Inflation levels * Cost of living adjustments * Economic policy decisions * Wage negotiations
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