Courtesy of Doug Short.
Here is a table showing the annualized change in Headline and Core CPI for each of the past five months. I’ve also included each of the eight components of Headline CPI and a separate entry for Energy, which is a collection of sub-indexes in Housing and Transportation.
We can make some inferences about how inflation is impacting our personal expenses depending on our relative exposure to the individual components. Some of us have higher transportation costs, others medical costs, etc.
The Trends in Headline and Core CPI
The chart below shows Headline and Core CPI for urban consumers since 2007. Core CPI excludes the two most volatile components, food and energy.
Core CPI has been on the rise and has now risen above the Fed’s inflation target of 2%. However, the more attention-grabbing headline CPI has moderated in recent months after hitting an interim high in September 2011, a decline that was primarily driven by lower energy costs, especially as reflected in the transportation category. This trend, however, appears to be reversing. Gasoline prices have been steadily rising since mid-December (more on that topic here).
For a longer-term perspective, here is a column-style breakdown of the inflation categories showing the change since 2000.
Note: For additional information on the component composition of the Consumer Price Index, see my Inside the Consumer Price Index.
