What is the purpose of the consumer price index?

A Consumer Price Index, or CPI, serves as a measurement of the change in price of goods and services purchased by households, specifically those in urban environments, such as food, transportation, and medical care. The CPI is not a precise measurement, but rather a statistical estimate based on the fluctuation in price of a subset of goods whose price is continuously monitored. The CPI serves primarily as a means of measuring the impact of inflation on an economy, and tracking the expenditures of "average" households. The CPI is generally computed on a monthly basis, allowing for a relatively fine-grained overview of the volatility of commonly purchased goods and services which are largely assumed to be of vital necessity to the consumer.