What is CPI

CPI stands for Consumer Price Index, which is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It is a key indicator of inflation, as it reflects the purchasing power of consumers and the cost of living. The CPI is used by policymakers, businesses, and individuals to make informed decisions about economic and financial matters. It is also used to adjust income and benefits, as well as to measure the effectiveness of economic policies. In finance, the CPI is an important tool for assessing the impact of price changes on the overall economy and for making investment and financial planning decisions. It provides valuable information on the trends in consumer spending and the cost of goods and services, which can help investors and financial professionals make informed decisions about asset allocation and risk management.