The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The CPI has been in focus given the elevated inflation levels in the US economy, which impacts consumers in various ways. The latest CPI report by the US Bureau of Labor Statistics showed a year-over-year inflation rate of 5% for March. The main driver of inflation for March was shelter, accounting for over 70% of the increase, with food, recreation, and household furnishings and operations also contributing. However, the agency noted that grocery prices did not rise, and energy inflation fell by 6.4% year-on-year.

The CPI tracks up to 100,000 goods and services per month, with key categories including housing, food, transportation, and apparel. Consumers should pay attention to the CPI as it impacts their purchasing power and affects their day-to-day expenses. Policymakers also use the CPI as a read into the health of the economy and to guide interest rate decisions. Understanding the CPI and its implications can help consumers make informed decisions about spending and saving.