Inside the Consumer Price Index: December 2025

Core Insights - Inflation significantly impacts household expenses, with the Consumer Price Index (CPI) being a crucial economic indicator [1] - The Bureau of Labor Statistics (BLS) categorizes expenditures into eight groups, with food, shelter, and clothing comprising over 60% of the CPI [2] CPI Component Analysis - Medical Care and Housing have seen the highest growth, each exceeding 100% since 2000, while Apparel has remained relatively unchanged [4] - Transportation exhibits high volatility, primarily driven by the Motor Fuel subcategory [5] - Energy costs are integrated into Housing and Transportation categories, with energy assigned a relative importance of 6.216 out of 100 in the CPI [7] Education Costs - College Tuition and Fees have increased nearly 200% since 2000, representing 1.324% of total expenditures, which can strain family budgets [8] - The BLS's calculation of tuition often does not reflect actual costs after financial aid, potentially exaggerating the inflation impact [9][10] Core Inflation Metrics - Core Inflation, excluding Food and Energy, is closely monitored, with a cumulative change of 85.5% since 2000 compared to 92.5% for headline CPI [12] Household Impact of Inflation - The effects of inflation vary significantly among households, with lower-income families and those with high transportation or medical costs being more vulnerable [15][16]