Inside the Consumer Price Index: September 2025

Core Insights - Inflation significantly impacts household expenses, with the Consumer Price Index (CPI) being a crucial economic indicator [1] - The CPI is divided into eight categories, with food, shelter, and clothing accounting for over 60% of the index [2] - Medical care and housing have seen the fastest price growth, each increasing over 100% since 2000, while apparel has only grown about 4% [4] CPI Component Analysis - Transportation exhibits high volatility, primarily driven by motor fuel prices, which affects overall transportation costs [5] - Energy costs are integrated into housing and transportation expenses rather than being a standalone category, with energy accounting for 6.216% of total expenditures [6][7] - College tuition and fees have increased nearly 200% since 2000, significantly impacting budgets for families with college-bound students [8] Core Inflation Metrics - Core inflation, which excludes food and energy, is closely monitored by economists and policymakers, with a cumulative change of 85.6% since 2000 [11][12] - As of September 2025, the annualized rate of change for headline CPI is 3.01%, while core CPI is at 3.02% [12] Household Impact of Inflation - The effects of inflation vary widely among households, with lower-income families and those with high transportation or medical costs being particularly vulnerable [15][16] - Inflation volatility disproportionately affects households with limited budgets, making discretionary spending challenging [16]