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United States Inflation Experience across the Income Distribution

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4.3 United States CPIs by income.pdf (application/pdf, 539.74 KB)

The Bureau of Labor Statistics (BLS) produces the Consumer Price Index (CPI) as a measure of price change faced by consumers. The CPI for All Urban Consumers (CPI-U) targets the inflation experience of nearly all consumers in the United States which may not reflect the inflation experience of an individual household or group of households. Increasingly there is user demand for CPIs across the income distribution. This paper builds on the authors’ prior research by modifying the cohort definition and extending the period of analysis. From 2006-2022, lower income households generally faced larger inflation rates than higher income households. The short-term gap between lower and higher income household’s inflation rates changes when the cohort definition accounts for varying family sizes.