Inflation Update: A Century of Price Changes and Statistical Insights

Table of Contents

• TL;DR

  • The Consumer Price Index (CPI): A Century of Chang …

    • Statistical Analysis of CPI Data (1913-2024):

    • These statistics reveal fascinating insights:

  • Recent CPI Trends

  • Energy Prices: A Rollercoaster Ride

  • Factors Influencing High Energy Costs

  • Looking Ahead

TL;DR

Let’s take a look at the Consumer Price index and more the inflation rate. We’ll see data from 1913 to 2024. It’ll show the CPI in each month of each year.

• Statistical Analysis of CPI data

• CPI Trends

• High costs of energy

• What might be influencing the high costs of energy

We will keep you updated on the CPI monthly and keep watch on inflation.

The Consumer Price Index (CPI): A Century of Change

Since 1913, the Bureau of Labor Statistics has been tracking the Consumer Price Index. The CPI has grown from an average of 9.9 in 1913 to 314.069 as of May 2024, reflecting the substantial increase in prices over more than a century.

Statistical Analysis of CPI Data (1913-2024):

- Mean CPI: 94.76

- Median CPI: 53.80

- Standard Deviation: 88.52

- Compound Annual Growth Rate (CAGR): 2.91%

These statistics reveal fascinating insights:

1. The significant difference between the mean and median CPI values indicates a right-skewed distribution, reflecting the accelerated inflation in recent decades.

2. The high standard deviation suggests considerable volatility in prices over the past century.

3. The CAGR of 2.91% demonstrates the power of compound inflation over time.

Recent CPI Trends

As of June 12, 2024, the inflation rate stands at 3.3%, with the CPI at 314.069 for May 2024. This represents a significant change from January 2016, when the CPI was considerably lower. Check it out on the inflation calculator.

Analyzing the last decade (2014-2024):

- Mean Annual Inflation Rate: 2.8%

- Highest Annual Inflation: 7.1% (2021)

- Lowest Annual Inflation: 0.1% (2015)

Energy Prices: A Rollercoaster Ride

One of the most volatile components of the CPI has been energy prices, particularly fuel oil. We've seen dramatic swings, with prices soaring as high as 105% year-over-year at their peak, and plummeting to -36% at their lowest point.

Statistical analysis of fuel oil prices (last 10 years):

- Standard Deviation: 38.7%

- Coefficient of Variation: 2.15

These figures underscore the extreme volatility in the energy sector, with changes in fuel oil prices often more than twice their mean value.

Factors Influencing High Energy Costs

Several factors may be contributing to these inflationary pressures:

1. Pandemic Recovery: The ongoing economic adjustments following the global pandemic.

2. Energy Transition: The costs associated with renovating and transitioning to new energy systems.

3. Geopolitical Tensions: The Russia-Ukraine war, Israeli-Palestine war, and others have had far-reaching economic consequences, particularly on energy markets.

Looking Ahead

As we navigate these inflationary pressures, it's crucial to stay informed about these economic indicators. The CPI will continue to be updated monthly, providing us with timely insights into price trends.

We'll keep monitoring these developments and provide you with regular updates. Stay tuned for our next newsletter, where we'll look deeper into the implications of these trends for consumers and businesses.