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The Consumer Price Index (CPI) increased slightly in October over September, before seasonal adjustment, according to the U.S. Bureau of Labor Statistics. But the CPI is 0.2 percent lower compared to a year ago, and this was the eighth month of year-over-year price deflation. In other words, the purchasing power of the dollar is higher than it was a year ago. Lower energy and transportation prices, compared to a year earlier, are primarily responsible for the trend.
Stepping back and looking at the trend over the long term, the value of the dollar is far lower than it used to be. Over the past ten years, the CPI has increased by 28.5 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
October 2009 |
10 years
ended
October 2009 |
| All Items |
-0.2 |
28.5 |
| Food and Beverages |
-0.3 |
31.7 |
| Housing |
-0.4 |
31.3 |
| Apparel |
1.4 |
-7.9 |
| Transportation |
-3.8 |
25.8 |
| Medical Care |
3.5 |
49.7
|
| Recreation |
0.0 |
12.1 |
| Education & Communication |
2.7 |
26.5 |
| Other Goods and Services |
7.5 |
42.6 |
| Special Indexes: |
|
|
| Energy |
-14.0 |
78.5 |
| Food |
-0.6 |
31.8 |
| All Items less Food and Energy |
1.7 |
23.8 |
To Read More...
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.
Members: To read the April 6 article, please visit the archive. You can find the password for the archive in the latest AIER Online email.
Non-Members: You may either purchase this article or become a member. Membership starts at just $39 and entitles you to 22 issues of Research Reports and 12 issues of the Economic Bulletin, which range in length from 4- to 8-page newsletters to full-sized books.
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