U.S. CPI Components

A brief introduction to top level components in the U.S. Consumer Price Index (CPI).

The Consumer Price Index (CPI), introduced in 10/28/20 Post - U.S. Consumer Price Inflation, measures consumer price inflation in the U.S. The CPI is composed of many components, or categories, of goods and services purchased by consumers. The charts below show these components.

The first chart shows the CPI and CPI with the food and energy components subtracted out. This chart shows that, in the long run, CPI, and CPI without food and energy, have pretty much tracked each other.

In the short term however, fast changing food and energy prices can add a lot of volatility to CPI. For this reason, they are often subtracted from CPI to see a smoother, longer term consumer price inflation trend. The next chart shows the year-over-year change in these indices and illustrates this volatility difference even more clearly.

The next chart shows the top-level components of CPI. All of these indices are scaled so that they have a value of 100 at the last data point. This means that when an index was at 50, prices in that category were half of what that are today. This chart shows the different amounts of price changes over time in the different components. For instance, over the time window in this chart, the price of medical care has increased the most, and the price of apparel has increased the least.

All of the previous charts were seasonally adjusted in an attempt to remove seasonal variations. The next chart is the same as the previous one except that it is not seasonally adjusted. The point of providing this chart is that non-seasonally adjusted data goes back further in time.

The next two charts show the same seasonally adjusted and non-seasonally adjusted CPI components, except that they show the real (inflation adjusted) components. These charts show the size of the price increases/decreases of individual components relative to overall consumer price inflation.