1. What is CPI Change?

The Consumer Price Index (CPI) change measures the difference in price levels between two time periods. It's a key indicator of inflation or deflation in an economy.

2. How Does the Calculator Work?

The calculator uses the simple CPI change formula:

Where:

• \( CPI_{end} \) — Consumer Price Index at end period
• \( CPI_{start} \) — Consumer Price Index at start period

Explanation: The formula calculates the absolute change in price levels between two points in time.

3. Importance of CPI Calculation

Details: CPI change is crucial for understanding inflation trends, adjusting wages and pensions, and making informed economic decisions.

4. Using the Calculator

Tips: Enter both CPI values in index points (typically scaled so that 100 represents a base year). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What does a positive CPI change indicate?
A: A positive value indicates inflation (prices have increased between the two periods).

Q2: What does a negative CPI change mean?
A: A negative value indicates deflation (prices have decreased between the two periods).

Q3: How is CPI different from inflation rate?
A: CPI is an index, while inflation rate is typically expressed as the percentage change in CPI over time.

Q4: What time periods does CPI typically cover?
A: CPI is often calculated monthly, with comparisons made month-to-month or year-to-year.

Q5: Are there limitations to CPI as a measure?
A: CPI may not reflect individual consumption patterns and can be slow to incorporate new products or quality changes.