What does the acronym 'CPI' stand for in economic indicators?

CPI stands for Consumer Price Index.

The Consumer Price Index measures how the prices paid by households for a representative basket of goods and services change over time. Statistical agencies assign weights to categories such as housing, food, transportation, medical care, and apparel, then collect prices and combine them into an index. The percentage change in the index is commonly used to track consumer-price inflation.

In the United States, the Bureau of Labor Statistics produces several CPI measures. CPI-U covers all urban consumers, while CPI-W covers urban wage earners and clerical workers. The BLS also publishes core measures that exclude food and energy for analytical purposes, although “core CPI” is not the same thing as the full CPI.

CPI is often confused with a cost-of-living index, but they are not identical. A fixed or periodically updated basket may not fully capture consumers substituting between products, changes in quality, or new goods. Another major inflation gauge is the Personal Consumption Expenditures price index, which the Federal Reserve favors for its policy target. CPI remains important for contracts, wage adjustments, and inflation comparisons.