What exactly is the consumer price index?
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Take a bunch of commonly purchased consumer goods: foodstuffs, clothing, etc. Track the prices of those goods over time and take a weighted average of them. Now you can estimate how much an average person is spending to get by in any year compared to any other year that you have data. This is helpful for tracking inflation, as these staple goods are the most widely and regularly consumed, so inflation will show up here very clearly.
Take a bunch of commonly purchased consumer goods: foodstuffs, clothing, etc. Track the prices of those goods over time and take a weighted average of them. Now you can estimate how much an average person is spending to get by in any year compared to any other year that you have data. This is helpful for tracking inflation, as these staple goods are the most widely and regularly consumed, so inflation will show up here very clearly.
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