Consumer Price Index (CPI) Meaning and Definition

Pronunciation

/ˈkɑnʊmərpʰrɪs ɪnˈdɛks/

Part of Speech

Noun

Definition

A statistical measure that tracks the change in prices of a basket of goods and services purchased by households, providing a snapshot of inflation and economic activity.

Examples

The Consumer Price Index (CPI) has increased by 2% over the past year.
The central bank uses the CPI to inform its monetary policy decisions.

Synonyms

Inflation Rate
Cost of Living Index

Antonyms

Deflation
Stability

Additional Information

The Consumer Price Index (CPI) is widely used by governments, businesses, and researchers to gauge economic indicators, such as inflation, wage growth, and living standards. It is calculated by weighting the prices of a broad range of goods and services, including housing, food, transportation, and healthcare.

Understanding the CPI is crucial for individuals, businesses, and policymakers as it provides valuable insights into the economy and helps inform decisions on inflation targeting, monetary policy, and resource allocation.

Etymology

The term “Consumer Price Index” was first introduced in the United States in the 1910s, as a measure to track the cost of living for urban families. The index has undergone several revisions and expansions over the years to include more comprehensive coverage of goods and services.

Usage Notes

The Consumer Price Index is typically released quarterly or annually, depending on the country, and is often used as a benchmark for financial forecasting and policy decisions.

Cultural References

The Consumer Price Index has been referenced in popular culture, such as in songs, films, and literature, often symbolizing economic uncertainty and inflation.

Idiomatic Expressions or Phrases

Expressions like “keeping pace with the CPI” or “inflation-proofing” have become common idioms in financial and economic contexts.

Related Words or Phrases

Terms like “inflation rate”, “cost of living index”, and “economic indicators” are closely related to the Consumer Price Index and are often used interchangeably.

Collocations

Common collocations with the term “Consumer Price Index” include “inflation rate”, “monetary policy”, and “economic growth”.

Frequency of Use

The Consumer Price Index is a critical economic indicator, with its frequency of use reflecting the importance of understanding inflation and economic trends.

Common Misspellings

Common misspellings of the term include “Compound Price Index”, “Discount Price Index”, and “Consumers Price Index”.