#CPIWatch
Aspects Covered by CPI Watch
• Distinction between Overall CPI and Core CPI
Overall CPI includes all items, while Core CPI excludes volatile items such as food and energy to capture the underlying trends of inflation.
• Comparison with Other CPI Indicators
• Chained CPI takes into account changes in consumer behavior and the changing basket of goods, making it more accurate but slower.
• It provides different reflections of inflation and may be used for financial or tax adjustments.
• Limitations and Calculation Methodology
• CPI calculates the value of a fixed basket of goods and does not account for changes in product quality or improvements.
• It also does not reveal the phenomenon of "hidden shrinkage" such as reducing product size without changing price.
• Additionally, it focuses only on consumers in urban areas, which may not represent the experience in rural areas.