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Consumer Price Index

kuhn-SOO-mer PRYS IN-deks /kənˈsuːmər praɪs ˈɪndɛks/

noun phraseC1GRETOEFLIELTS

formalbusinesseconomics

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.

The CPI is a key indicator of inflation and deflation. It represents the change in prices paid by urban consumers for a representative basket of goods and services.

The story behind the word. This phrase combines three distinct words. 'Consumer' comes from the Latin 'consumere,' meaning 'to take up, use up.' 'Price' comes from the Latin 'pretium,' meaning 'price, value.' 'Index' comes from the Latin 'indicare,' meaning 'to point out' or 'to show.' So, the 'Consumer Price Index' literally 'points out' the 'value' of goods 'used up' by 'consumers,' serving as a crucial indicator of economic health.

Word relationships

CPI: The common abbreviation for Consumer Price Index, used interchangeably in most contexts.

Collocations

monthly Consumer Price Index
annual Consumer Price Index
core Consumer Price Index
Consumer Price Index data

Example sentences

"The Consumer Price Index rose by 0.5% last month, indicating continued inflationary pressures." Government economic report.
"Analysts closely watch the Consumer Price Index for signs of economic recovery or slowdown." News headline.
"Changes in the Consumer Price Index are often used to adjust wages and social security benefits." Academic paper on economics.

Memory hook

The 'CONSUMER' buys goods, the 'PRICE' changes, and the 'INDEX' tracks those changes. Price tracker for consumers

When not to use

Do not use 'Consumer Price Index' when referring to a general sense of rising prices without needing the specific economic metric. 'Inflation' is usually sufficient.

Fun facts

Different countries have their own versions of the CPI, calculated based on typical spending patterns in their respective economies.

Related words

Inflation, Cost of living

Explore more words

Monetary Policy, Budget Constraint, kpi, Economic Growth