CPI refers to the consumer price index, which is expressed by the price of a package of goods selected in a specific year. Based on a certain year, the price level of this year can be obtained by comparison. CPI is an important indicator to measure inflation.

Second, the calculation formula

CPI= (the value of a group of fixed commodities at current price/the value of a group of fixed commodities at base price) × 100%. The fixed weight is calculated according to the weighted arithmetic average index formula, that is, k' = σ kw/σ w, and the fixed weight is w, where the molecular k in the formula is the single index of each sales volume.

CPI shows how much the average family spends on a representative group of goods today than at some time in the past.

Third, what does the decline mean?

The decline of CPI indicates deflation, economic depression and the decline of people's purchasing power. It also indicates that the general account has been compressed and effectively regulated, which means that inflation has been alleviated, which further means that inflation is no longer our concern. Obviously, we will focus our policies on stimulating the economy. Secondly, if the CPI drops to a negative value, it shows the fact of deflation and further shows that the economy is now in recession, which is a clear signal.

The decline in CPI indicates that inflation has been curbed and the upward trend of prices has weakened. At the same time, it also shows that the country's currency liquidity may tend to be slow, which means that the economy may turn cold. In the short term, the decline of CPI and the downward trend of prices are beneficial to consumers, but if it lasts for too long, it will cause a recession in enterprises and affect income growth, and ultimately consumers will be affected.

If the CPI is too low, it will lead to excessive deflation, tight money market, slow currency circulation and sluggish market sales, which will affect the enthusiasm of enterprises for production and investment, cause enterprises to "hesitate to invest" and residents to "hesitate to buy", and a large amount of funds will be idle, which will limit the growth of social demand and eventually lead to weak economic growth. On the contrary, if CPI is too high, it will also lead to inflation.