Here’s How Inflation Breaks Down for Each Sector in Today’s CPI Data

Here is a table showing the annualized change over the past three months for Headline and Core CPI. 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 eight components.

The Trend 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.

CPI-categories-since-2000

Core CPI is still substantially below the Fed’s inflation target of 2%, but both headline and Core CPI have begun to rise in recent months. If we extrapolate the latest rise over the next year, Core CPI would hit the Fed’s target rate by the end of summer. Of course, monthly CPI numbers are too volatile to place any confidence is extrapolations of this sort.

Doug Short Ph.d is the author of dshort.com.

How Should You Invest for Inflation? Join the winning team of stock pickers with Wall St. Cheat Sheet’s acclaimed premium newsletter >>