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Policymakers, businesses, and investors all keep a close eye on inflation, which is the rise in cost of goods and services. A little bit of inflation is a sign of economic growth, while too much inflation can hurt the economy. But with millions of goods and services bought and sold every day, how do we actually know how much things cost across the whole economy? Thats where the inflation indexes come in. Inflation indexes gather price data from various sources across the economy and compile them into one number to give a snapshot view of how much things cost. Seeing how much and how quickly prices are rising or falling can tell you a lot about economic growth that drives financial markets and your investments. There are three main inflation indexes that well focus on: the CPI, or Consumer Price Index, the PCE, or Personal Consumption Expenditures Price Index, and the PPI, or Producer Price Index. Each inflation index is compiled and calculated differently and has different purposes.