Financial Impact Financial markets are extremely sensitive to unexpected changes in the index. Projections of the change in the CPI are fairly accurate, but inaccurate projections are not infrequent. What to look for Change in consumer prices excluding food and energy core consumer prices. Medical price inflation versus overall and core consumer price inflation this can be an early warning that employee benefit costs will start growing. Strengths Release provides information on a wide variety of goods and services.
Data are available by a wide-range of geographical and urban size categories.
Provides another snap-shot of the inflation outlook. Core CPI is less volatile than core PPI and so it can give a better view of long-term inflation trends. Weaknesses Index handles technological change poorly. Thus, the CPI can overstate price changes when new technology is introduced. The CPI assumes that consumers never adjust their buying habits in the face of rising prices.