Popularly known as inflation, CPI indicates the change in price of consumer goods and services. Although, there are many different methodologies to measure inflation, CPI uses a constant basket of goods and services, and these are: food and services, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services.
The CPI indicator is published by the Bureau of Labour statistics and covers only inflation as experienced by consumers. It includes sales and excise taxes, because these are necessary expenditures by the consumer for a specific item. It is difficult to establish one perfect inflation indicator. That is why other indicators measure different aspects of inflation such as the PPI and the ECI.
CPI is another very popular economic indicator for which it is difficult to produce a single, straightforward interpretation. In general, a rise in inflation lowers the purchase power of a given currency, and as such may lead to depreciation of a currency. On the other hand, a rise in inflation may generate an increase in the nominal interest rates which, in turn, may result in rising interest of international investors in the given currency.
Periodicity of publication
CPI is published every month by the Bureau of Labour Statistics.