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Inflation is impacting personal consumption and hurting growth.
The latest retail inflation data, yet again, underscores how volatile food prices continue to hold hostage.
Also depictes broader inflation but also the lynchpin of economic growth, namely, personal consumption.
While February’s headline Consumer Price Index based reading remained virtually unchanged from the preceding month, at 5.09%.
The pace of food price gains computed from the Consumer Food Price Index accelerated by 36 basis points to 8.66%.
Consumer Price Index
The Consumer Price Index is a key metric used to measure inflation.
It tracks the average change in prices that consumers pay for a representative basket of goods and services over time.
Here are the basic details about CPI:
What it measures: The CPI measures the average change in prices that consumers pay for a basket of goods and services.
This basket includes items like food, housing, transportation, clothing, medical care, recreation, and education.
How it's calculated: The CPI is calculated by the Bureau of Labor Statistics (BLS) in the United States.
The BLS tracks the prices of a fixed basket of goods and services every month.
They then compare the current prices to the prices in a base period (which is currently 2018).
The CPI is expressed as a percentage change from the base period.
How it's used: The CPI is used by policymakers, businesses, and consumers to track inflation.
It is also used to adjust wages, pensions, and other social security benefits for inflation.
An increase in the CPI indicates inflation, which means that the purchasing power of money is going down.
A decrease in the CPI indicates deflation, which means that the purchasing power of money is going up.
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