CPI stands for Consumer Price Index. It is a measure of inflation that tracks the changes in the price of a basket of goods and services typically consumed by households over time. The CPI is calculated by taking the average price change for each item in the basket and weighting it by the relative importance of that item in the overall consumption pattern. The CPI is widely used as an economic indicator to monitor inflation and to adjust salaries, wages, and benefits for cost-of-living changes.