Definition: The Consumer Price Index (CPI) measures the change in the cost of consumer goods and services.
Description: The Consumer Price Index is used as a measure of US inflation. The index tracks changes in the market price of a particular basket of goods and services, which includes items such as food, clothing, education, medical care, transport, recreational activities, and utilities. In addition to being a key measure of inflation, CPI is also used to determine the official US poverty threshold and how government money should be allocated. The US Department of Labor bases the index on the prices of goods and services in 85 US cities. The index does not take into account discounts or rapidly fluctuating prices. The CPI is considered a more reliable economic indicator when food and energy prices are omitted (CPI ex food & energy), as these are subject to bigger price fluctuations.
Influence: Under normal economic conditions, an increase in CPI leads to growth in interest rates, which in turn boosts the US dollar, as the higher rates make investment more attractive.
Market Impact: High
Released: From the 15th to 21st of each month (on a Tuesday or Thursday), soon after the release of PPI, at 13:30 GMT.
Source: US Bureau of Labor Statistics