Breaking Down the U.S. Inflation Rate

Breaking Down the U.S. Inflation Rate

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INSIGHTi

Breaking Down the U.S. Inflation Rate
December 21, 2021
Focus on rising consumer prices has increased amid the latest data release from the Bureau of Labor
Statistics showing that the inflation rate, as measured by the Consumer Price Index for All Urban
Consumers (CPI-U), was 6.8% over the 12 months ending November 2021, the largest 12-month increase
in 39 years. Inflation is generally defined as an increase in prices across the economy broadly. However,
not all prices used to calculate the inflation rate increase by the same amount, and inflation rates can
differ across geographic locations. This Insight examines the inflation rate across various product
categories and geographic areas.
Inflation Across Selected Expenditure Categories
Table 1 below shows a breakdown of inflation across certain expenditure categories. Core inflation
(inflation that does not include energy and food prices) was lower than overall inflation, at 4.9% over the
12 months ending in November 2021. The increase in energy prices, historically a volatile source of
inflation, was significantly higher over the same period (33.3%).
Commodities (goods) inflation (11.9%) outstripped services inflation (3.8%) in the 12 months ending in
November 2021. Supply chain disruptions and bottlenecks, which have plagued the economy throughout
the Coronavirus Disease 2019 (COVID-19) pandemic, tend to affect goods more than services, as goods
are traded at a much higher rate than services. Within goods, used cars and trucks, a category which has
seen particularly high inflation for several months, saw inflation of 31.4% over the past year. New
vehicles also had relatively high inflation, although considerably less than used cars and trucks, at 11.1%.
Table 1. 12-Month Percentage Change, Consumer Price Index for All Urban Consumers
(CPI-U), Selected Expenditure Categories, November 2021
Relative Importance October
Expenditure Category
2021, as a Percentage
12-month Percentage Change
All items
100.000%
6.8%
Food
13.995%
6.1%
Food at home
7.733%
6.4%
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Relative Importance October
Expenditure Category
2021, as a Percentage
12-month Percentage Change
Cereals and bakery
0.979%
4.6%
products
Meats, poultry, fish, and
1.838%
12.8%
eggs
Dairy and related
0.750%
1.6%
products
Fruits and vegetables
1.311%
4.0%
Nonalcoholic beverages
0.929%
5.3%
and beverage materials
Other food at home
1.935%
5.7%
Food away from home
6.262%
5.8%
Energy
7.469%
33.3%
Energy commodities
4.207%
57.5%
Fuel oil
0.111%
59.3%
Motor fuel
4.022%
58.0%
Gasoline (all types)
3.937%
58.1%
Energy services
3.262%
10.7%
Electricity
2.446%
6.5%
Natural gas (piped)
0.816%
25.1%
All items less food and energy
78.536%
4.9%
Commodities less food and
20.755%
9.4%
energy commodities
Apparel
2.725%
5.0%
New vehicles
3.856%
11.1%
Used cars and trucks
3.350%
31.4%
Medical care commodities
1.493%
0.2%
Alcoholic beverages
0.997%
1.9%
Tobacco and smoking
0.615%
8.9%
products
Services less energy services
57.781%
3.4%
Shelter
32.425%
3.8%
Rent of primary
7.585%
3.0%
residence
Owners’ equivalent rent
23.514%
3.5%
of residence
Medical care services
7.002%
2.1%
Transportation services
5.012%
3.9%
Motor vehicle
1.085%
4.9%
maintenance and repair
Motor vehicle insurance
1.557%
5.7%

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Relative Importance October
Expenditure Category
2021, as a Percentage
12-month Percentage Change
Airline fares
0.596%
-3.7%
Source: Bureau of Labor Statistics.
Notes: Relative importance are weights used by BLS based on estimates of how consumers distribute expenditures across
categories. More information on relative importance can be found here.
Inflation Across Regions and Selected Local Areas
Table 2 shows current inflation levels broken out by geographic area. There is less variation in inflation
across regions and localities than across expenditure categories, though even relatively small differences
in inflation rates can be meaningful for individuals who are seeing prices rising relatively faster where
they live and work. Note that locations with the highest inflation are not necessarily the most expensive in
absolute terms: in fact, the Northeast and West generally have a higher cost of living than other regions.
In the 12 months ending in November 2021, the Midwest region and the Tampa-St. Petersburg-
Clearwater, FL, local area experienced the highest inflation, and the Northeast region and the San
Francisco-Oakland-Hayward, CA, local area experienced the lowest inflation.
Table 2. 12-Month Percentage Change, Consumer Price Index for All Urban Consumers
(CPI-U), Regions and Selected Local Areas, November 2021
Geographic Area
12-Month Percentage Change
U.S. city average
6.8%
Region

Northeast
6.0%
Midwest
7.3%
South
7.2%
West
6.5%
Selected local areas

Atlanta-Sandy Springs-Roswel , GAa
7.9%
Baltimore-Columbia-Towson, MDa
6.3%
Boston-Cambridge-Newton, MA-NH
5.3%
Chicago-Napervil e-Elgin, IL-IN-WI
6.0%
Dallas-Fort Worth-Arlington, TX
7.5%
Denver-Aurora-Lakewood, CO
6.5%
Detroit-Warren-Dearborn, MIa
5.5%
Houston-The Woodlands-Sugar Land, TXa
6.1%
Los Angeles-Long Beach-Anaheim, CA
6.0%
Miami-Fort Lauderdale-West Palm Beach, FLa
5.7%
Minneapolis-St. Paul-Bloomington, MN-WI
6.9%
New York-Newark-Jersey City, NY-NJ-PA
5.0%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MDa
5.6%

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Geographic Area
12-Month Percentage Change
Phoenix-Mesa-Scottsdale, AZa
7.1%
Riverside-San Bernardino-Ontario, CA
7.9%
San Diego-Carlsbad, CA
6.6%
San Francisco-Oakland-Hayward, CAa
3.8%
Seattle-Tacoma-Bellevue, WAa
6.5%
St. Louis, MO-ILa
7.5%
Tampa-St. Petersburg-Clearwater, FL
8.0%
Urban Alaskaa
6.3%
Urban Hawaii
5.4%
Washington-Arlington-Alexandria, DC-VA-MD-WV
5.8%
Source: Bureau of Labor Statistics (BLS).
Notes: Complete data by detailed expenditure category may be found here.
a. 12-month percentage change from October 2020 to October 2021. The BLS explains that it surveys prices for food,
fuel, and several other items every month in all areas. The BLS surveys prices for goods and services every month in
certain areas, and alternating months in other areas.
As described above, prices of different items have changed at different rates over the past year. However,
nearly all categories increased and some of the largest categories of expenditures that consumers face,
such as food and energy, increased relatively rapidly from a historical perspective. In fact, food and
energy indexes both hit 13-year highs. The relatively high inflation seen both in November 2021 and
throughout much of 2021 has been a topic of concern to policymakers. The Federal Reserve’s Federal
Open Market Committee (FOMC) most recently did not decide to increase interest rates but did project
rate increases in 2022. Additionally, the FOMC decided to double the pace of reducing its asset purchases
in response to inflation as well as general market conditions. Starting in mid-January, the Federal Reserve
will reduce monthly net asset purchases by $20 billion for Treasury securities and $10 billion for agency
mortgage-backed securities. For more information about inflation and related policy in 2021, see CRS
Report R46890, Inflation in the Wake of COVID-19, by Marc Labonte and Lida R. Weinstock; and CRS
Insight IN11792, Federal Reserve: Tapering of Asset Purchases, by Marc Labonte.

Author Information

Mark P. Keightley
Lida R. Weinstock
Specialist in Economics
Analyst in Macroeconomic Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of

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