<p>In itself, a price index for single period does not tell you much, as any index is, by definition, without dimension. Assuming that 3.41 is the annual change in the CPI (= Consumer Price Index), this would imply an inflation rate of 3.41%. To be specific, it implies that the total price of a representative commodity basket changed by 3.41%. The WPI (= Wholesale Price Index) covers different commodities and hence yields a different inflation rate. Which one to prefer depends on what you are interested in. Consumer Prices are more relevant to private households, but businesses care about wholesale prices.</p>

CC BY-SA 3.0
2018-04-05T12:12:01.813Z
2018-04-05T12:12:01.813Z
E. Sommer
<p>How can cpi 3.41 and Wpi 3.54 be interpreted? I know that cpi gives the inflation rate but what is it that we understand from these figures?</p>

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2018-04-05T08:01:27.373Z
You mean besides the inflation rate? Are you asking what "inflation rate" means? Or are you asking how CPI and WPI are calculated?
Giskard
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2018-04-05T08:03:24.417Z
I meant what is it that we derive from the numbers. For instance a correlation of 0.9 indicates a strong relationship between variables.
Harry
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2018-04-05T10:19:46.340Z
You said yourself that "CPI gives the inflation rate". That is what we derive from the number. Does this answer your question? If not, could you clarify what your exact question is?
Giskard
CC BY-SA 3.0
2018-04-05T10:46:01.187Z
By 3.54 do we infer that the price has risen or fallen compared to the previous period?
Harry
<inflation><price-index>
Interpretation of price indices
Harry
# Interpretation of price indices

(Asked by: username_0 on 2018-04-05)

How can cpi 3.41 and Wpi 3.54 be interpreted? I know that cpi gives the inflation rate but what is it that we understand from these figures?

**Tags:** inflation, price-index
> **Comments:**
> **username_1**: You mean besides the inflation rate? Are you asking what "inflation rate" means? Or are you asking how CPI and WPI are calculated?  
> **username_0**: I meant what is it that we derive from the numbers. For instance a correlation of 0.9 indicates a strong relationship between variables.  
> **username_1**: You said yourself that "CPI gives the inflation rate". That is what we derive from the number. Does this answer your question? If not, could you clarify what your exact question is?  
> **username_0**: By 3.54 do we infer that the price has risen or fallen compared to the previous period?  

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## 1 answers

### Answer by username_2 on 2018-04-05. Score: 1

In itself, a price index for single period does not tell you much, as any index is, by definition, without dimension. Assuming that 3.41 is the annual change in the CPI (= Consumer Price Index), this would imply an inflation rate of 3.41%. To be specific, it implies that the total price of a representative commodity basket changed by 3.41%. The WPI (= Wholesale Price Index) covers different commodities and hence yields a different inflation rate. Which one to prefer depends on what you are interested in. Consumer Prices are more relevant to private households, but businesses care about wholesale prices.


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