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The Consumer Price Index (CPI) increased at an annual rate of less than 1 percent in September over August, according to data released last week by the U.S. Bureau of Labor Statistics. But the CPI is still 1.3 percent lower compared to a year ago. This was the seventh month of year-over-year price deflation. In other words, the purchasing power of the dollar is higher now than it was a year ago. Lower energy prices and transportation prices, compared to a year earlier, are primarily responsible for the trend.
Over the longer term, the value of the dollar remains far lower than it used to be. Over the past 10 years, the CPI has increased by 28.6 percent. This means it now takes about $1.29 to buy what a dollar bought in September 1999.
The chart and table below show longer-term trends in the overall CPI and major categories of goods and services.
Source: U.S. Bureau of Labor Statistics. Click to enlarge chart.
Percent Change in Selected Components of the CPI
(not seasonally adjusted) |
|
12 months
ended
September 2009 |
10 years
ended
September 2009 |
| All Items |
-1.3 |
28.6 |
| Food and Beverages |
0.0 |
31.8 |
| Housing |
-0.5 |
31.5 |
| Apparel |
1.1 |
-7.1 |
| Transportation |
-9.8 |
25.6 |
| Medical Care |
3.5 |
49.7
|
| Recreation |
0.5 |
12.7 |
| Education & Communication |
2.8 |
26.6 |
| Other Goods and Services |
7.5 |
42.5 |
| Special Indexes: |
|
|
| Energy |
-21.6 |
78.7 |
| Food |
-0.2 |
32.0 |
| All Items less Food and Energy |
1.5 |
23.9 |
Read more about price inflation:
The April 6, 2009 issue of Research Reports includes a detailed table showing how much the CPI and dozens of the goods and services included in it changed, in percentage terms, in 2008. The biggest drop: gasoline prices, down 43 percent. The biggest increase: potatoes, up 22 percent. This Research Reports issue is available free to AIER subscribers or $2 for non-members.
Use AIER’s Online Cost of Living Calculator to see how much the general price level has increased since any year going back to 1913.
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The calculation was based on Non Seasonally Adjusted CPI, which is what we use for CPI updates. It rose from 215.834 in August to 215.969 in September. It's a monthly increase of 0.06% and 0.75% annualized.