What Is CPI?

So, if you’ve ever asked yourself the question “what is CPI?”, don’t worry, you’re definitely not alone because this is a very common question that is asked quite frequently in the context of the economy, inflation, and even personal finance. Well, the full form of CPI is actually the Consumer Price Index.

Let’s break it down like this: if you purchased groceries, gasoline, and paid rent last year, and now you are paying more for the same things this year, the CPI is a way to measure how much more you are spending. This is a major way that governments measure inflation. Essentially, it is a way to measure how quickly the cost of living is rising.

However, you might also be wondering when the CPI is released. Well, in the United States, for instance, the Bureau of Labor Statistics releases the CPI report every month, and this informs people of the changes in prices. This is why people, including investors and consumers, closely follow this news. To sum up: What is a CPI? It’s a significant economic measure that allows you to monitor changes in the cost of a "basket" of frequently used products. Knowing it can help you gain a deeper understanding of your personal finance situation as well as the economy.