Consumer Price Index (CPI): What It Is and Why It Matters

What Is a Consumer Price Index (CPI)?

By Jeremy Bowman – Updated Mar 13, 2025 at 10:18 AM EST

Key Points

CPI tracks average price changes for goods and services, influencing economic policies.
Monthly CPI reports display short-term price trends, essential for understanding market shifts.
CPI affects Social Security adjustments and Federal interest rate decisions, impacting investments.
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You've probably heard of the Consumer Price Index (CPI), even if you don't know exactly what it means. Especially in inflationary times, the Consumer Price Index is a popular talking point in the business media since it's used as a proxy for inflation and has a direct impact on the daily lives of consumers.

Keep reading to learn more about what the Consumer Price Index is and how it affects the economy and your budget.

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Businessperson is using yellow measuring tape to measure growth of black upward arrow against green background. — Image source: Getty Images

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Academic views on CPI

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Investing in Consumer Staples Stocks

No matter what the state of the economy is, we always need these products.

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When people have a little extra cash, they indulge in offerings from companies such as these.

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

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