CPI can be used to recognize periods of inflation and deflation. A large increase in the CPI in a short period of time may indicate a period of inflation, and a large decrease in the CPI in a short period of time may indicate a period of deflation. However, because the CPI includes highly volatile food and oil prices, it may not be a reliable measure of inflation and deflationary periods. For more accurate detection, the core CPI (CPILFESL) is often used. When using the CPI, it does not apply to all consumers and should not be used to determine relative cost of living. Also, because CPI is based on sample prices rather than overall averages, it is a statistical measure that is prone to sampling error.
Inflation is likely to cool even further. Ahead of this CPI announcement, the stock market seems to be thinking a lot. Prior to the announcement, the stock market appears to be slightly up.