The Consumer Price Index (CPI) is an index that measures the rate at which the prices of consumption goods and services are changing from month to month (or from quarter to quarter). The prices are collected from shops or other retail outlets. The usual method of calculation is to take an average of the period-to-period price changes for the different products, using as weights the average amounts that households spend on them. CPIs are official statistics that are usually produced by national statistical offices, ministries of labour or central banks.
A CPI measures the rate of price inflation as experienced and perceived by households in their role as consumers. It is also widely used as a proxy for a general index of inflation for the economy as a whole, partly because of the frequency and timeliness with which it is produced. It has become a key statistic for purposes of economic policy-making, especially monetary policy.
For more information, see the CPI manual.« Back to Glossary Index