Overview
The Consumer Price Index (CPI) is designed to measure the average price changes of a fixed basket of consumption goods and services commonly purchased by resident households over time. It measures price movements (i.e., changes in prices) but not absolute price levels at a point in time.
The CPI is used as:
• A measure of consumer price inflation
• Inputs in the formulation of government policies
• As a means of deriving real values in the compilation of economic statistics