For experienced investors in trading financial instruments, they might realize the benefits of the Consumer Price Index (CPI), but for the inexperienced, we would like to briefly explain what CPI is and its importance that we should be aware of, especially for investors.
In general, CPI, compiled by the US Bureau of Labor Statistics, is the most widely used measure of inflation, or a figure that can be used to represent the value of something in a calculation.
More specifically, CPI is a measure that examines the average value of packages of goods and services, such as transportation, food, and health care, and so on. CPI is calculated by changing the value of each item in those pre-defined packages of goods or services and then calculating the average value.
As for benefits, CPI price changes are also used to estimate price changes related to the cost of living and are one of the most frequently used statistics for determining the period of inflation or deflation.
On the other hand, CPI can provide governments, businesses as well as the general public with ideas on price fluctuations in the economy, and it can also be an important guide in making decisions for confirmed economic announcements.
All interested audiences and investors can follow the release of CPI in short for fundamental analysis as well as for economic knowledge on our Facebook page.