The Consumer Price Index (CPI) can be accurately interpreted as a direct measure of the overall economic health of a country, meaning that if CPI increases, the economy is necessarily improving.

The Consumer Price Index (CPI) measures how the prices of goods and services that people buy change over time. When the CPI increases, it usually means that prices are going up, which can suggest that people are spending more money. However, an increase in CPI does not always mean the economy is improving because rising prices can also indicate inflation, which can hurt consumers if their wages don’t increase at the same rate. For example, if the CPI goes up by 3% but wages only increase by 1%, people may struggle to afford the same things they could before. Therefore, while a rising CPI can reflect changes in the economy, it does not solely indicate economic health without considering other factors like income growth and employment levels.