Consumer Price Index (CPI)

The Consumer Price Index is a measure of the periodic change in the price of a constant basket of basic goods and services. The goods and services are representative of the consumption by residents in a household of a specific area. The basket can’t include all the items households consume but it does include the important one’s under the following segments: housing, transportation, medical, food, clothing, education, insurance and financial services to name a few.

As prices in the basket vary, so will that measure indicating a positive or negative change in CPI. It is a very important economic indicator and provides a general measure of price inflation changes so that the Reserve Bank of Australia can evaluate future monetary policy.

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