The US consumer price index (CPI) serves as a key indicator reflecting price changes for consumer goods and services. From March 2021 to the present, the CPI has demonstrated notable fluctuations, significantly impacting various aspects of the economy. Such changes in the CPI are closely monitored by policymakers and economists, as they influence inflation rates, purchasing power, and economic growth. Let’s examine the effects of these changes on the economic landscape.

CPI dynamics from March 2021 to date


From March 2021, the CPI began to rise sharply, peaking in the summer of 2022. The main causes included the effects of the pandemic, supply chain disruptions, and increased demand for goods and services associated with the economic recovery. Price increases affected almost all categories of goods, especially food, fuel, and rental housing, affecting consumers' budgets.

In response to the increased inflation, the authorities began to take measures aimed at stabilising the CPI. Inflation gradually began to decline, thanks to the normalisation of supply chains, growth in domestic production and monetary policy adjustments. By the end of 2024, the inflation rate approached the target level, which was an important step towards stability in the economy and gave consumers a sense of confidence in the future.

Impact of CPI changes on the U.S. economy

Fluctuations in the CPI have a direct impact on the purchasing power of the population. The high rate of inflation experienced between 2021 and 2022 has reduced the real incomes of individuals, resulting in lower consumer spending and slower economic growth. In response, the Federal Reserve (Fed) was forced to tighten monetary policy, raising interest rates to control inflation. The subsequent decline in the CPI provided an opportunity to ease monetary policy, which had a positive effect on economic activity and investment growth.

Changes in CPI also affect the labour market. High inflation can lead to higher wages, which increases costs for companies and in some cases can lead to lower employment. When CPI stabilises, this usually creates a more stable environment for employment growth and allows unemployment to fall.


Conclusion: The impact of CPI changes on U.S. economic stability


Changes in the CPI in recent years have had a significant impact on the U.S. economy. Tracking and managing CPI movements allows the government and the Fed to take action to maintain economic stability and improve the quality of life of the population. A stable CPI contributes to sustained economic growth, lower unemployment rates, and improved citizen well-being, making it a critical indicator of a country's economic health.