CPI (Consumer Price Index) is one of the data used by the government to measure inflation.
CPI is an indicator to measure the changes in the overall price level of the market. The rise of the overall price level means inflation, while the decline of the overall price level means deflation. The price index is an index used to measure inflation or deflation in the economy. If the price index rises too much, it shows that inflation has become a factor affecting social and economic instability, and the central bank will have a tight monetary policy and related fiscal policies, which will have a certain impact on social and economic development. Therefore, the increase of the index will often have an impact on the economy. The price index is a macroeconomic indicator that can represent an economy. If the price index rises by 25% in half a year, it means that the cost is rising and the value of the currency is depreciating. Half a year ago, 100 yuan could only be bought or consumed in 75 yuan.
Extended data
Consumer price index
Consumer price index (English: consumer price index, abbreviated as CPI；; Also known as consumer price index), in economics, it is a price change index that reflects the prices of products and services related to residents' lives, expressed by percentage changes. It is one of the main indicators to measure inflation. Generally speaking, more than 3% is inflation and more than 5% is serious inflation. CPI is often an important reference index for market economic activities and government monetary policy.
CPI stability, full employment and GDP growth are often the most important social and economic goals. If the consumer price index rises too much, it shows that inflation has become an unstable factor in the economy, and the country will have the risk of tightening monetary and fiscal policies, which will lead to uncertain economic prospects. Therefore, the excessive rise of the index is often unpopular with the market. The available means include raising interest rates, tightening monetary policy, adopting a prudent fiscal policy, increasing production and stabilizing prices.
calculate
Consumer price index measures the average change of retail prices of many (usually hundreds) goods and services over a period of time. These different goods and services will be divided into several main categories. When calculating the consumer price index, each category has a weight that can show its importance. These weights are determined by investigating the products and services purchased by thousands of families and individuals. Weights are often revised to make them conform to the actual situation.
CPI is a fixed quantity and price index, which cannot reflect the improvement or decline of commodity quality, regardless of new products. If CPI deducts volatile food and energy statistics, this data is called "core price change rate". When the core price change rate is lower than 3%, the economic growth rate should be at a low level.
The composition of CPI in Chinese mainland includes the prices of eight categories of products: food, tobacco, alcohol and supplies, clothing, household equipment, medical care, transportation and communication, entertainment, education and culture, and housing, among which CPI has the highest weight.
Baidu Encyclopedia: Consumer Price Index