Consumer Price Index

The Consumer Price Index (CPI) is a way to keep tabs on how the cost of living changes. It tracks how prices for your everyday basket of goods like groceries, rent, and gas go up or down over time. If you’ve noticed that your grocery bill seems a lot higher this year, that’s the CPI showing us that prices are rising. It’s a handy way to see if inflation is hitting us hard.

For instance, during the COVID-19 pandemic, the CPI was an important measure. With supply chains getting messed up and people buying more than usual, prices for things like food and household items shot up. Lots of people saw their grocery bills skyrocket, especially for things like meat and toilet paper. The CPI showed just how much inflation was affecting everyday life, which helped guide decisions on things like interest rates and government aid. So, the CPI isn’t just a number, it’s a key indicator of how much more or less we’re paying for the stuff we need and helps shape economic policy.