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CPI less food & energy

Here's a comparison of the inflation rate for the CPI less food and energy, and the inflation rate for food and for energy. As you can see, rising energy prices by themselves don't seem to lead to higher inflation down the road. Ditto food prices. They will however make the overall CPI more volatile than otherwise. Their noise, statistically, so eliminating them doesn't change the bottom line while making the bottom line easier to see. Go to the BLS charts page and click on CPI vs CPI less food and inflation to see the difference.


Here is "core" inflation (the CPI less food and energy) versus (i) healthcare services, (ii) new car prices and (iii) apparel prices. On average the latter two have been flat (+0.1% for cars) or falling (-0.3% for clothing). Old houses didn't have closets. New ones have walk-in closets. In contrast over the past 20 years overall "core" inflation has been 2.0% ("headline" everything included inflation has been 2.2%). Healthcare has averaged 3.8%. That means that over the past 20 years "core" prices rose 50%, while healthcare prices more than doubled [compounded 20 times = (1.02)^20 vs (1.038)^20 in Excel]. That makes sense: out of the past 241 months, the prices for healthcare services rose faster than core inflation in all but 4 months.

3 thoughts on “CPI less food & energy

  1. clintong20

    Given that rising energy costs seem to play immediate effect on inflation, what other resources can we determine have this same affect? All the items on this graph seem to be correlated in lesser degree.

  2. Lauren Fredericks

    I find it rather surprising that rising energy prices do not lead to overall rising inflation, as I feel we are always hearing about rising gas prices terrorizing the economy.

  3. Chris Surran

    Rising medical costs have had a serious impact on modern day society. Not only are people having to budget more of their income towards medical services, but politicians have made medical care an important part of their political rhetoric.

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