<p>The Consumer Price Index (CPI) is a widely used measure of inflation, tracking changes in the average prices of goods and services purchased by households. It's calculated by the Bureau of Labor Statistics (BLS) in the United States.</p>

<h2>How It Works</h2>
<p>The CPI is calculated based on a 'basket' of goods and services, which is a representative sample of what people typically buy. This basket includes items like food, housing, transportation, and medical care. The BLS collects price data for these items from around the country, then calculates the average change in prices over time.</p>
<p>The CPI is published monthly, with the headline figure being the year-over-year change in the index. A rise in the CPI indicates inflation, while a fall indicates deflation.</p>

<h2>Why It Matters</h2>
<p>The CPI is a key indicator for the health of the economy and has significant impacts on various aspects of life:</p>
<ul>
  <li><strong>Wages and Salaries:</strong> Employers often use the CPI to adjust wages to keep pace with inflation.</li>
  <li><strong>Government Benefits:</strong> Many government benefits, such as Social Security, are indexed to the CPI, meaning they increase with inflation.</li>
  <li><strong>Interest Rates:</strong> The Federal Reserve uses the CPI to help set monetary policy, which can influence interest rates and borrowing costs.</li>
</ul>
<p>For example, in 2021, the U.S. experienced a significant increase in the CPI, reaching a 30-year high. This led to adjustments in minimum wage laws in some states, increases in Social Security benefits, and changes in monetary policy by the Federal Reserve.</p>