Purchasing power refers to the amount of goods and services a person or entity can buy with a given amount of money. It ...

Because the PCE and CPI differ in their formula, weighting, scope and other effects, their results are different. The Federal Reserve prefers to use the PCE price index to measure inflation.

Laura Porter / Investopedia The cost of living refers to the money ... Changes in the Consumer Price Index (CPI) are often a triggering event in labor and other contracts with escalation clauses.

In these contract negotiations, the Consumer Price Index (CPI) is one of the most frequently ... For example, the CPI provides the basis for the annual cost of living increases for recipients ...