The Consumer Price Index (CPI) is a key economic indicator that measures the change in the prices of a basket of goods and services commonly purchased by U.S. consumers. It is used to assess inflation or deflation by tracking changes in consumers' purchasing power over time.
🔑Key Points: Consumer Price Index (CPI)
đź’ˇDefinition:
A weighted average of prices for a basket of goods and services representing typical U.S. consumer spending.
đź“Ś Purpose:
Tracks inflation (rising prices) or deflation (falling prices). Measures changes in consumers' purchasing power.
🚨Calculated By: The Bureau of Labor Statistics (BLS).
⚠️ Release Timing: 📍 Published monthly by the U.S. Bureau of Labor Statistics (BLS) during the second week of the month.
đź’ˇEconomic Impact: Central Banks Use CPI:
âś…Expansionary Policy: Stimulates the economy if growth slows. âś…Contractionary Policy: Slows the economy if growth is too rapid.
đź’ˇSignificance:
A widely used indicator for adjusting wages, pensions, and other financial instruments to account for inflation.
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