Is it reliable?
To me it can be, like a slight rise was due to higher fuel cost (Which is true)...
And it takes it based on a average rating, so it product x stays the same price while producy y goes up by 20%, it will not show 20% as it shows the general picture...
Break down of CPI.
Food - 27.52%
Housing - 22.92%
Clothing - 4.43%
Transportation - 18.03%
Education - 7.29%
Health - 3.05%
Misc - 16.75%
Now, the CPI uses the above weightage. But for any one person, the breakdown is always different.
For example, housing cost does not matter to one who has already bought a flat and would have to pay the bank at whatever cost he/she bought the flat years ago. Similarly , one who has bought a car some years back is not affected by any hikes in public transportation but would look at rise in petrol or parking cost seriously. Or in another case, a young single working adult would not be bothered by education cost (unless he/she goes for further studies) while a parent with several children going into university would consider that a big expense. The other case would be a retired person who may be more affected by health cost compared with a adult in his twenties.
Thus, though CPI shows the prevailing cost of general population, the problem is no one actually fits into that general model. Thus, though it is good as an indicator, it is soulless to any individual looking at it.