Consumer Price Index (CPI)
The Consumer Price Index (CPI) is a measure of the average change in prices over time in a market basket of goods and services purchased by consumers. It is used to measure inflation and is one of the most widely used economic indicators. The CPI is calculated by taking the weighted average of prices of a basket of goods and services, such as food, transportation, and medical care. The weights are based on the share of the total spending on each item in the basket.
History of the Consumer Price Index
The Consumer Price Index was first developed in the United States in 1919 by the Bureau of Labor Statistics (BLS). The BLS was tasked with creating an index that would measure the average change in prices of goods and services purchased by consumers. The CPI was initially used to measure the cost of living in the United States, but it has since become an important economic indicator used to measure inflation. The CPI is now used by governments, businesses, and economists around the world to measure the cost of living and inflation.
Comparison of CPI
| Year | CPI |
|---|---|
| 2020 | 252.9 |
| 2019 | 250.1 |
| 2018 | 245.1 |
| 2017 | 240.0 |
| 2016 | 237.0 |
Summary
The Consumer Price Index (CPI) is an important economic indicator used to measure inflation and the cost of living. It is calculated by taking the weighted average of prices of a basket of goods and services, such as food, transportation, and medical care. The CPI is used by governments, businesses, and economists around the world to measure the cost of living and inflation. For more information about the CPI, visit the Bureau of Labor Statistics website.
See Also
- Gross Domestic Product (GDP)
- Producer Price Index (PPI)
- Inflation
- Interest Rates
- Unemployment Rate
- Gross National Product (GNP)
- Balance of Trade (BOT)
- Exchange Rates
- Gross National Income (GNI)
- Gross Domestic Income (GDI)
