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Category: Economics and Inflation
Date: 15 January 2020 We take a look at the latest US inflation numbers reported by the Bureau of Labor Statistics and focus on the year on year inflation rate of various expenditure categories such as food, shelter and energy.
Of the categories we look at in this article the medical services expenditure category had the highest year on year inflation rate for December 2019 closely followed by Energy. |
Inflation rate of various expenditure categories
The BLS had the following to say regarding the December 2019 consumer price index (CPI)
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in December on a seasonally adjusted basis after rising 0.3 percent in November, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.3 percent before seasonal adjustment. The indexes for gasoline, shelter, and medical care all rose in December, accounting for most of the increase in the seasonally adjusted all items index. The gasoline index increased 2.8 percent in December. Other major energy component indexes were mixed, and the energy index rose 1.4 percent. The food index rose 0.2 percent in December with the indexes for both food at home and food away from home increasing over the month. The index for all items less food and energy rose 0.1 percent in December after increasing 0.2 percent in November. Along with the indexes for shelter and medical care, the indexes for apparel, motor vehicle insurance, recreation, and new vehicles all increased in December. The indexes for used cars and trucks, household furnishings and operations, and airline fares were among those to decline. The all items index increased 2.3 percent for the 12 months ending December, the largest 12-month increase since the period ending October 2018. The index for all items less food and energy also rose 2.3 percent over the last 12 months, the same increase as the periods ending October and November. The food index rose 1.8 percent over the last 12 months, while the energy index increased 3.4 percent.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in December on a seasonally adjusted basis after rising 0.3 percent in November, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.3 percent before seasonal adjustment. The indexes for gasoline, shelter, and medical care all rose in December, accounting for most of the increase in the seasonally adjusted all items index. The gasoline index increased 2.8 percent in December. Other major energy component indexes were mixed, and the energy index rose 1.4 percent. The food index rose 0.2 percent in December with the indexes for both food at home and food away from home increasing over the month. The index for all items less food and energy rose 0.1 percent in December after increasing 0.2 percent in November. Along with the indexes for shelter and medical care, the indexes for apparel, motor vehicle insurance, recreation, and new vehicles all increased in December. The indexes for used cars and trucks, household furnishings and operations, and airline fares were among those to decline. The all items index increased 2.3 percent for the 12 months ending December, the largest 12-month increase since the period ending October 2018. The index for all items less food and energy also rose 2.3 percent over the last 12 months, the same increase as the periods ending October and November. The food index rose 1.8 percent over the last 12 months, while the energy index increased 3.4 percent.
Food
The food index increased 0.2 percent in December after rising 0.1 percent in November. The index for food at home rose 0.1 percent, the same increase as the prior month. The index for meats, poultry, fish, and eggs was the only major grocery store food group index to rise in December, increasing 1.3 percent as the index for beef rose 2.4 percent and the index for eggs increased 2.9 percent. In contrast, the index for cereals and bakery products fell 0.4 percent in December after rising in November. The index for nonalcoholic beverages also fell 0.4 percent, while the indexes for fruits and vegetables and for other food at home both declined 0.3 percent over the month. The index for dairy and related products was unchanged in December after rising in November. The index for food away from home rose 0.3 percent in December after rising 0.2 percent in November. The index for limited service meals increased 0.4 percent, while the index for full service meals rose 0.2 percent. The food at home index increased 0.7 percent over the last 12 months. Five of the six major grocery store food group indexes rose over the past 12 months, with increases ranging from 0.3 percent (both cereals and bakery products and other food at home) to 2.4 percent (dairy and related products). The fruits and vegetables index declined over the span, falling 1.3 percent. The index for food away from home rose 3.1 percent over the last year. The index for full service meals increased 3.3 percent and the index for limited service meals rose 3.0 percent.
Energy
The energy index increased 1.4 percent in December, its third consecutive monthly increase. The gasoline index rose 2.8 percent in December following a 1.1-percent rise in November. (Before seasonal adjustment, gasoline prices fell 1.6 percent in December.) The electricity index declined in December, falling 0.5 percent after rising in November. The index for natural gas increased 0.3 percent in December, its third monthly increase in a row. The energy index increased 3.4 percent over the past 12 months, with its major component indexes mixed. The gasoline index increased 7.9 percent and the fuel oil index rose 4.6 percent. However, the index for natural gas fell 3.5 percent and the index for electricity declined 0.4 percent.
Shelter
The shelter index rose 3.2 percent over the 12-month span, and the medical care index rose 4.6 percent. Apparel (-1.2 percent) and used cars and trucks (-0.7 percent) were among the few indexes to decline over the last year.
Other categories
The apparel index rose 0.4 percent in December following a 0.1-percent increase in November. The index for motor vehicle insurance rose 0.2 percent after falling in November. The index for new vehicles rose 0.1 percent in December, ending a series of five consecutive monthly declines.
The indexes for recreation and for education also increased 0.1 percent in December. The index for used cars and trucks fell 0.8 percent in December after rising in October and November. The index for household furnishings and operations declined 0.4 percent in December, its largest monthly decline since December 2014. The index for airline fares fell 1.6 percent in December, its third consecutive monthly decline, and the index for personal care fell 0.2 percent.
The interactive graphic below shows the year on year inflation rate of various expenditure categories for the month of December 2019
The food index increased 0.2 percent in December after rising 0.1 percent in November. The index for food at home rose 0.1 percent, the same increase as the prior month. The index for meats, poultry, fish, and eggs was the only major grocery store food group index to rise in December, increasing 1.3 percent as the index for beef rose 2.4 percent and the index for eggs increased 2.9 percent. In contrast, the index for cereals and bakery products fell 0.4 percent in December after rising in November. The index for nonalcoholic beverages also fell 0.4 percent, while the indexes for fruits and vegetables and for other food at home both declined 0.3 percent over the month. The index for dairy and related products was unchanged in December after rising in November. The index for food away from home rose 0.3 percent in December after rising 0.2 percent in November. The index for limited service meals increased 0.4 percent, while the index for full service meals rose 0.2 percent. The food at home index increased 0.7 percent over the last 12 months. Five of the six major grocery store food group indexes rose over the past 12 months, with increases ranging from 0.3 percent (both cereals and bakery products and other food at home) to 2.4 percent (dairy and related products). The fruits and vegetables index declined over the span, falling 1.3 percent. The index for food away from home rose 3.1 percent over the last year. The index for full service meals increased 3.3 percent and the index for limited service meals rose 3.0 percent.
Energy
The energy index increased 1.4 percent in December, its third consecutive monthly increase. The gasoline index rose 2.8 percent in December following a 1.1-percent rise in November. (Before seasonal adjustment, gasoline prices fell 1.6 percent in December.) The electricity index declined in December, falling 0.5 percent after rising in November. The index for natural gas increased 0.3 percent in December, its third monthly increase in a row. The energy index increased 3.4 percent over the past 12 months, with its major component indexes mixed. The gasoline index increased 7.9 percent and the fuel oil index rose 4.6 percent. However, the index for natural gas fell 3.5 percent and the index for electricity declined 0.4 percent.
Shelter
The shelter index rose 3.2 percent over the 12-month span, and the medical care index rose 4.6 percent. Apparel (-1.2 percent) and used cars and trucks (-0.7 percent) were among the few indexes to decline over the last year.
Other categories
The apparel index rose 0.4 percent in December following a 0.1-percent increase in November. The index for motor vehicle insurance rose 0.2 percent after falling in November. The index for new vehicles rose 0.1 percent in December, ending a series of five consecutive monthly declines.
The indexes for recreation and for education also increased 0.1 percent in December. The index for used cars and trucks fell 0.8 percent in December after rising in October and November. The index for household furnishings and operations declined 0.4 percent in December, its largest monthly decline since December 2014. The index for airline fares fell 1.6 percent in December, its third consecutive monthly decline, and the index for personal care fell 0.2 percent.
The interactive graphic below shows the year on year inflation rate of various expenditure categories for the month of December 2019
Medical care services inflation by far outstripped the year on year inflation rate of other expenditure categories, with its year on year inflation rate sitting at 5.1%. Shelter inflation of 3.2% was the 2nd highest of the expenditure categories we looked at, while apparel showed the biggest decline with it declining by -1.2% over the last 12 months.
Brief background of the CPI
Brief Explanation of the CPI The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods and services. The CPI reflects spending patterns for each of two population groups: all urban consumers and urban wage earners and clerical workers. The all urban consumer group represents about 93 percent of the total U.S. population. It is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed, and retired people, as well as urban wage earners and clerical workers.
Not included in the CPI are the spending patterns of people living in rural nonmetropolitan areas, farming families, people in the Armed Forces, and those in institutions, such as prisons and mental hospitals. Consumer inflation for all urban consumers is measured by two indexes, namely, the Consumer Price Index for All Urban Consumers (CPI-U) and the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).
Brief Explanation of the CPI The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods and services. The CPI reflects spending patterns for each of two population groups: all urban consumers and urban wage earners and clerical workers. The all urban consumer group represents about 93 percent of the total U.S. population. It is based on the expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed, and retired people, as well as urban wage earners and clerical workers.
Not included in the CPI are the spending patterns of people living in rural nonmetropolitan areas, farming families, people in the Armed Forces, and those in institutions, such as prisons and mental hospitals. Consumer inflation for all urban consumers is measured by two indexes, namely, the Consumer Price Index for All Urban Consumers (CPI-U) and the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).