Consumer Price Index (CPI)

Is a quarterly measure of inflation. What the average consumer spends on goods and services such as housing, clothing, health, alcohol, transport and so on is represented by a basket of goods. If the cost of the stuff in the basket goes up inflation is said to have risen. If the cost of the stuff goes down inflation has decreased. Normally the basket is a bit of a mix, say transport has increased but the cost of clothes is cheaper so it gives an overall picture. It makes the Reserve Bank of Australia (RBA) happy if inflation hangs around the target range of 2 to 3% a year.