Every month, all investors pay attention to one report called Consumer Price Index (CPI). Consumer Price Index measures the monthly change in the price American consumers pay. The Bureau of Labor Statistics (BLS) calculates the CPI as the weighted average of the prices of baskets of goods and services that represent total U.S. consumer spending. 
 
CPI is one of the most popular indicators of inflation and deflation. The CPI report uses different research methods, price samples, and index weights than the Producer Price Index (PPI), which measures changes in prices received by U.S. producers of goods and services. It is important to the economy because if the CPI is too high, it indicates inflation. Inflation is an essential indicator of the health of the economy. Governments and central banks use CPIs and other indices to make economic decisions. 
 
The key is whether to raise or lower interest rates. Higher interest rates are designed to make borrowing more expensive, lower consumer spending, and curb inflation. Low-interest rates work differently and are designed to encourage consumer spending and keep inflation aligned with the country's goals. For Example, this year, the U.S. government increased the interest because of the high CPI rate, so the stock market crashed. It is evident that it was occurring within the Consumer Price Index (CPI) category and was predictable. 

김진호 강남포스트 학생기자  webmaster@ignnews.kr

<저작권자 © 강남포스트, 무단 전재 및 재배포 금지>