The CPI, or Consumer Price Index, is composed of price changes in eight major categories of goods and services: food, tobacco, alcohol and supplies, clothing, household equipment and maintenance services, recreational and cultural goods and services, health care and personal goods, transportation and communications, and housing. This indicator is crucial for measuring price changes of consumer goods and services related to residents' lives, and is a key indicator in macroeconomic analysis, policy decision-making, and national economic accounting.
Fluctuations in the CPI are directly related to national macroeconomic control decisions, such as whether the central bank will adjust interest rates or the reserve requirement ratio. In addition, it indirectly affects the capital market, such as the stock market, futures market and financial market. the level of CPI reflects the degree of inflation or deflation, and is important for judging the purchasing power of money and evaluating changes in real wage levels. In salary negotiations, the CPI is often used as a reference for adjusting nominal salaries, usually after inflation has occurred, by less than actual inflation.
Overall, the CPI is not only a barometer for measuring the health of the economy, but also an important reference point for economic decisions by businesses and individuals, and it plays a central role in inflation management, contractual adjustments, and financial market volatility.