What Does CPI Mean?


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Arun Raj answered
CPI or Consumer Price Index is an index of price used to measure changes in the cost of essential goods and services with relation to a fixed base period. Many also called the CPI as the Consumer Price Index. Changes in the CPI are used to find out the alterations in the price with reference to the cost of living. The CPI is also nicknamed as "headline inflation."    The U.S. Bureau of Labor Statistics deals with two kinds of CPI statistics: CPI for urban wage earners and clerical workers, and the CPI for all urban consumers (C-CPI-U). The C-CPI-U is an enhanced representation of the general populace because it accounts for nearly 88 percent of the population. In fact the CPI is the commonly used price indicator to find out trends in inflation for a country. It computes and compares on a monthly basis, the total cost of a "typical or general market basket" of goods and services purchased. Then information attained is of great importance to the business community and the government for decision makes. A huge rise in the CPI in a short period can mean inflation while a dip in CPI during a short period of time can imply deflation.

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