What is one key measurement CPI provides for consumers?

The Consumer Price Index (CPI) is a critical economic indicator that measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. It provides insight into inflation or deflation, as it reflects how the prices of everyday items—such as food, housing, clothing, and transportation—change over time. Tracking these price changes allows consumers and policymakers to understand the purchasing power of currency, cost of living, and overall economic health.

This measurement is particularly important for consumers as it directly influences their cost of living; knowing how prices are changing helps them budget and make informed financial decisions. The CPI can also be used to adjust income eligibility levels for governmental assistance programs and to adjust other economic indicators for inflation, thus having widespread implications for economic policy and personal finances.